UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2015~~2016

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 0000-33519

GLOBAL FUTURE CITY HOLDING INC.

(Exact name of registrant as specified in its Charter)

Nevada		98-0360989
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

2 Park Plaza, Suite 400, Irvine, CA 92614

(Address of principal executive offices)

Registrant’s telephone number, including area code: (949) 769-3550

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.001 par value

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o Yes x No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. o Yes x No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained herein, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company. o Yes x No

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant onwas $33,710,357 based upon the price ($2.60) at which the common stock was last sold as of June 30, ~~2015:~~2016, ~~$34~~the last business day of the registrant’s most recently completed second fiscal quarter,~~121~~ multiplied by the approximate number of shares of common stock held by persons other than executive officers,~~910~~ directors and five percent stockholders of the registrant without conceding that any such person is an “affiliate” of the registrant for purposes of the federal securities laws.

The registrant had 4840,~~617~~431,~~029~~680 shares of common stock outstanding as of April 1317, ~~2016~~2017.

NOTE REGARDING FORWARD LOOKING STATEMENTS

Certain information included in this Annual Report on Form 10-K and other filings of the Registrant under the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well as information communicated orally or in writing between the dates of such filings, contains or may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements in this Annual Report on Form 10-K, including without limitation, statements related to our plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from expected results. Among these risks, trends and uncertainties are the availability of working capital to fund our operations, the competitive market in which we operate, our ability to generate a profit and execute our business plan, the retention of key personnel, our ability to protect and defend our intellectual property, the effects of governmental regulation and other risks identified in the Registrant’s filings with the Securities and Exchange Commission from time to time.

In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of such terms or other comparable terminology. Although the Registrant believes that the expectations reflected in the forward-looking statements contained herein are reasonable, the Registrant cannot guarantee future results, levels of activity, performance, or achievements. Moreover, neither the Registrant, nor any other person, assumes responsibility for the accuracy and completeness of such statements. The Registrant is under no duty to update any of the forward-looking statements contained herein after the date of this Annual Report on Form 10-K.

TABLE OF CONTENTS

		Page
PART I		1
ITEM 1	BUSINESS	1
ITEM 1A	RISK FACTORS	89
ITEM 1B	UNRESOLVED STAFF COMMENTS	139
ITEM 2	PROPERTIES	139
ITEM 3	LEGAL PROCEEDINGS	139
ITEM 4	MINE SAFETY DISCLOSURES	1310
PART II		11
ITEM 5	MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	1411
ITEM 6	SELECTED FINANCIAL DATA	1512
ITEM 7	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	1512
ITEM 7A	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	1817
ITEM 8	CONSOLIDATED FINANCIAL STATEMENTS	1918
ITEM 9	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	3940
ITEM 9A	CONTROLS AND PROCEDURES	3940
ITEM 9A(T)	CONTROLS AND PROCEDURES	3940
ITEM 9B	OTHER INFORMATION	3940
PART III		41
ITEM 10	DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE	4041
ITEM 11	EXECUTIVE COMPENSATION	4244
ITEM 12	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	4345
ITEM 13	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	4345
ITEM 14	PRINCIPAL ACCOUNTING FEES AND SERVICES	4446
PART IV		47
ITEM 15	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	4547
SIGNATURES		4649

PART I

ITEM 1. BUSINESS

When used in this report, the terms “Global”, “Company”, “we”, “our or “us” mean, unless the context otherwise indicates, Global Future City Holding Inc. and its subsidiaries.

The following discussion should be read in conjunction with the Risk Factors presented in Item 1A of Part I and the Cautionary Statement for Forward-Looking Information and Management's Discussion and Analysis of Financial Condition and Results of Operations set forth in Item 7 of Part II.

Corporate History

Our Company was incorporated in the State of Nevada on October 12, 2000 under the name Cogen Systems, Inc. We changed our name to Snocone Systems, Inc. on December 6, 2001. On April 1, 2005, Snocone Systems, Inc. and its wholly-owned subsidiary, WYD Acquisition Corp., a California corporation (the “Merger Sub”), merged with Who’s Your Daddy, Inc. (“WYD”), an unrelated, privately held California corporation, whereby the Merger Sub merged with and into WYD. After the merger, WYD continued its corporate existence as a direct, wholly-owned subsidiary of Snocone Systems, Inc. under the laws of the State of California. On April 13, 2005, we changed our name to Who’s Your Daddy, Inc. and, effective June 1, 2010, we changed our name to FITT Highway Products, Inc. Effective October 29, 2013, we merged with F.I.T.T. Energy Products, Inc. (“FITT”) whereby FITT merged into our Company, with our Company being the surviving entity. Effective October 29, 2014 the name of our Company was changed to Global Future City Holding Inc. (the “Company” or “we”) and our trading symbol changed from “FHWY” to “FTCY.”

~~Acquisitions~~Detention ~~and~~of ~~Agreements~~our Former Chief Executive Officer

WeOn ~~entered~~August ~~into~~30, 2016, we reported on Form 8-K that our former Chief Executive Officer (“CEO”), President, and Chairman of the ~~following~~Board ~~agreements~~of ~~during~~Directors, Ning Liu, was detained ~~2015~~in ~~that~~the ~~helped~~People’s ~~pave~~Republic of China (“PRC”) and ~~shape~~we had begun investigating the facts and circumstances surrounding his detainment. On September 9, 2016, we filed Form 8-K reporting that Mr. Liu was taking a 30 day leave of absence from all positions he held with our ~~business~~Company. Finally, on October 21, 2016, because of his ongoing legal challenges in ~~its~~the ~~current~~PRC, ~~direction~~Mr. Liu resigned from all his positions in our Company. Also on October 21, 2016, our Board of Directors appointed Michael R. Dunn to the positions of Chief Executive Officer (“CEO”), President and Chairman of the Board.

~~Sky~~Mr. ~~Rover~~Liu ~~Stock~~continues ~~Purchase~~to ~~Agreement~~be detained in the PRC. We have been informed by Mr. Liu’s attorney in the PRC that, on March 2, 2017, he was convicted in Hunan Province for violations of the PRC’s multi-level marketing regulations and sentenced to 10 years in prison. We have likewise been informed by Mr. Liu’s attorney that he has an appeal hearing scheduled in Hunan Province in the near future and, if he is unsuccessful in that hearing, he can appeal to a national court in Beijing China. This process could take months and it is very difficult to get reliable information on the particulars of Mr. Liu’s case to make any intelligent assessment as to the final outcome. While many of the facts of his detention and conviction are unclear, we have been informed that Mr. Liu allegedly raised capital through the sale of a digital coin, named Wan Fu Bi, all while representing himself as the CEO of our Company and an unaffiliated private company, Great Coin Inc. (“Great Coin”). As further described below, Great Coin, which was co-owned by Mr. Liu and Michael Dunn, is a technology company that developed the GX Coin, a digital currency, and a trading platform for the GX Coin. Through a February 2016 agreement with Great Coin, our Company’s direct-selling program members were able to convert a portion of their membership accounts into GX Coins. It is unclear whether investors in Wan Fu Bi believed it was the same as the GX Coin. Even though Mr. Liu was allegedly representing himself as the CEO of our Company and also of Great Coin, his activities were never authorized by either company, Wan Fu Bi has no affiliation with either company or Michael Dunn, and no funds resulting from the alleged activities were ever received by our Company, Great Coin or Michael Dunn.

OnWhile ~~April~~no ~~17,~~actions ~~2015,~~have webeen ~~completed~~filed ~~the~~against ~~closing~~our ofCompany as a ~~Stock~~result ~~Purchase~~of ~~Agreement~~Mr. ~~(the~~Liu’s ~~“SPA”) with Sky Rover Holdings~~actions, ~~Ltd.,~~his adetention ~~corporation~~and ~~formed~~legal ~~under~~challenges ~~the~~have ~~laws of the Republic of Seychelles (“Sky Rover”). Under the SPA~~had, ~~certain~~and ~~unaffiliated~~continue ~~parties~~to ~~(collectively~~have, ~~the~~a ~~“Acquiring~~material adverse ~~Shareholders”)~~impact ~~cumulatively~~on ~~acquired approximately 87~~us.3% ofWe ~~the~~believe ~~outstanding~~that ~~shares~~potential ofbusiness ~~stock~~partners ofhave ~~our~~refused ~~Company in exchange for our receipt of $400,000 in cash~~ and ~~the~~or ~~contribution~~avoided ofdoing ~~4,000,000~~business ~~E-Gold~~with ~~crypto-assets~~us ~~(“EGD”)~~due to ~~our~~Mr. ~~wholly-owned~~Liu’s ~~subsidiary,~~actions. ~~Global~~Our ~~Modern~~efforts ~~Enterprise~~to ~~Limited,~~implement aour ~~Hong~~direct ~~Kong~~selling ~~entity~~program ~~(the~~became ~~“EGD~~significantly ~~Subsidiary”).~~more Indifficult ~~connection~~due ~~with~~to ~~the~~questions ~~closing of~~surrounding ~~the SPA,~~ Mr. Liu’s ~~Lei~~detention. ~~Pei,~~In ~~an officer of Sky Rover~~addition, ~~purchased 6,000,000 newly-issued shares of~~ our ~~common~~investment ~~stock for $3,000,000 cash~~ in aGlobal ~~separate~~Future ~~transaction~~City ~~that~~Regional ~~closed~~LLC, onan ~~March~~EB-5 ~~30,~~Regional ~~2015~~Center, ~~which~~ was ~~meant~~significantly impaired due to ~~provide working capital for our business. Additionally,~~ Mr. ~~Lei~~Liu’s ~~Pei~~actions, ~~provided~~and ~~the~~potential ~~initial~~project ~~down~~partners ~~payment~~decided ofto ~~$150,000~~investigate ~~for~~their ~~the~~opportunities ~~acquisition of Powerdyne which is described below~~elsewhere.

In connection with the share purchase by Sky Rover, we intended to market and deploy the EGD through a reward program (“Rewarded EGD”). In order to ensure compliance with existing securities regulations, on February 10, 2015 we filed a Request for No-Action Relief (the “No-Action Letter”) with the Securities and Exchange Commission (“SEC”) to obtain clarification that the SEC would not recommend enforcement action against our Company and its related subsidiaries regarding our potential use of the EGD. Despite several inquiries, we did not receive a substantive response from the SEC on the No-Action Letter. This led management to elect to rescind the previous contribution of EGD and to focus on the acquisition of GX-Life as described below. As a result, on October 9, 2015, we withdrew the No-Action Letter from consideration by the SEC.

GX-Life Share Exchange Agreement

On October 2, 2015, we completed a Share Exchange Agreement with GX-Life Global, Inc. (“GX-Life”), whereby we spun-off 100% of our ownership interest in the EGD Subsidiary (including the 4,000,000 EGD received under the SPA) in exchange for 100% of the outstanding common stock of GX-Life, a private company owned primarily by our CEO, Ning Liu, and our COO/CFO, Michael Dunn. GX-Life has developed a robust, scalable platform to support direct selling opportunities throughout the world. This platform, coupled with its complement of 25 consumer products to initially be marketed through the direct selling platform, is intended to replace our previous interest in EGD.

The GX-Life Transactions effectuated a change in control of our Company, as the former shareholders of GX-Life acquired 21,280,000 shares of our common stock representing an aggregate voting power of 45.9%. Individually, (i) Michael Dunn acquired an additional 24.1% voting power of our common stock, (ii) Ning Liu acquired 2.6% voting power of our common stock, and (iii) Tomoe Masuya acquired an additional 26.65% voting power of our common stock. The former shareholders of GX-Life are all unaffiliated from one another, and none of them have a beneficial interest or hold any ownership interest in each other's entity and disclaim status as a "group" as defined by SEC Rules.

AsWhile ~~described above, we had previously intended to market the EGD through a reward program~~Mr. ~~GX-Life~~Liu ~~has~~is ~~determined~~no ~~that~~longer ~~incorporating~~involved awith ~~crypto-asset~~our ~~other~~Company, ~~than~~many ~~EGD~~potential ~~into~~investors aand ~~reward~~strategic ~~program~~partners, ~~would~~particularly bethose ~~important~~in tothe ~~its success. As a result~~PRC, onbecame ~~October~~distrustful ~~21,~~of ~~2015~~us, ~~GX-Life~~resulting ~~entered into~~in asignificant ~~Subscription~~harm ~~Agreement~~to ~~with~~our ~~Great Coin~~credibility, ~~Inc.,~~our abrand ~~Nevada~~and ~~corporation~~our ~~(“Great~~ability ~~Coin”),~~to araise ~~company~~capital. ~~co-owned~~As bya ~~our~~result ~~CEO and~~of ~~our COO/CFO~~Mr. ~~Under~~Liu’s ~~the~~alleged ~~Subscription Agreement~~actions, we ~~agreed~~were forced to ~~purchase~~suspend ~~5,000,000~~our ~~“GX~~direct ~~Coins”,~~selling anprogram ~~open~~(the ~~source~~“GX-Life ~~digital currency~~Direct ~~that~~Selling ~~functions~~Program”) asin athe ~~store~~fourth quarter of 2016 ~~value~~ and ato ~~medium~~abandon ofand ~~exchange,~~write-off atour ainvestment ~~price~~in ofour ~~$0.50~~EB-5 ~~each~~Regional ~~for~~Center aline ~~total subscription price~~ of ~~$2,500,000~~business. InWe ~~October~~believe ~~2015, we paid Great Coin $350,000 for 700,000 GX Coins under the agreement~~Mr. ~~However,~~Liu’s ~~the purchase was~~alleged ~~never~~actions ~~consummated~~were ~~because~~ the ~~Subscription~~primary ~~Agreement~~factor ~~was~~in ~~subsequently superseded and replaced by way of~~ our ~~February~~stock ~~17,~~price ~~2016 Software~~falling ~~License~~from ~~and~~a ~~Services~~high ~~Agreement~~of ~~with~~$3.64 ~~Great~~per ~~Coin~~share (in the ~~“Software~~first ~~License~~quarter ~~Agreement”)~~of ~~under~~2016 ~~which~~to ~~Great~~a ~~Coin~~low ~~granted~~of a$0.51 ~~license~~per ~~for~~share in the GXfourth ~~Coins~~quarter ~~for an upfront license fee~~ of ~~$350~~2016,~~000~~ ~~which~~causing ~~was~~us ~~deemed~~to ~~paid~~experience bysignificant alost ~~payment~~opportunities ~~made~~to inraise ~~October~~capital. ~~2015~~In ~~for~~addition, GXafter ~~Coins~~focusing ~~and~~a ~~the~~significant ~~remaining~~portion ~~obligations~~of ~~under~~our ~~the~~resources ~~Subscription~~for ~~Agreement~~several ~~were~~months ~~canceled.~~attempting Into ~~connection~~redirect ~~therewith,~~our ~~Great~~marketing ~~Coin~~strategy ~~will~~to bean ~~managing~~online asales ~~trading~~program ~~platform~~with ~~that~~little ~~will~~success, ~~allow~~we ~~for~~were ~~our~~forced ~~members~~ to ~~convert~~lay ~~status~~off ora ~~rewards~~majority ~~points~~of ~~into~~our GXemployees ~~Coins~~in ~~and~~January ~~will allow~~2017 ~~them also~~ to ~~sell~~reduce costs ~~GX Coin~~ to ~~other~~a ~~members~~minimal level.

~~Great~~In ~~Coin~~response isto Mr. Liu’s alleged actions and their significant harm to our Company, on March 20, 2017 we entered into a ~~technology~~Stock ~~company~~Issuance ~~that~~Cancellation isAgreement inwith ~~the~~Mr. ~~process~~Liu and certain of ~~developing~~his affiliates (the GX“Stockholders”) ~~Coin.~~under ~~Initially,~~which ~~seventy-five~~the ~~million~~Stockholders ~~(75~~agreed to return 8,~~000~~349,~~000)~~906 GXcommon ~~Coins~~shares owned ~~will~~by bethem ~~created~~to ~~with~~our ~~secure, 256-bit~~Company ~~encryption~~for cancellation. AsWe aretain ~~digital~~the ~~currency,~~right GXin ~~Coin~~the ~~will~~future beto ~~tradable~~bring onactions anagainst ~~online~~Mr. ~~platform;~~Liu ~~the~~for ~~ownership~~any and ~~transfer of~~all ~~which~~further ~~will~~damages ~~be recorded~~his onalleged anactions ~~encrypted~~may have caused. In a separate agreement, ~~secured~~Mr. ~~distributed~~Liu ~~ledger~~also ~~system~~relinquished ~~using~~his ~~technology~~50% ~~similar~~ownership in Great Coin to Mr. Dunn and Mr. Dunn retains the ~~distributed ledger~~right ~~technology~~to ~~used~~bring future actions against Mr. Liu for ~~trading~~any ~~digital~~damages ~~currencies~~his alleged actions may have caused.

~~Acquisition~~Business ~~of Global Future City Regional Center (formerly, Powerdyne Regional Center, LLC) (“Powerdyne”)~~Summary

OnWe ~~March~~are 26a holding company currently focused in the area of consumer product sales through our wholly-owned subsidiary, GX-Life Global, Inc. (“GX-Life”). During late 2015 and early 2016, we ~~purchased~~spent ~~100%~~considerable ofresources developing the ~~membership~~GX-Life ~~interests in~~Direct ~~Powerdyne~~Selling Program, anincluding EBhiring specialized staff and retaining legal counsel with direct sales program experience. Our goal was to implement the GX-5Life ~~Regional~~Direct ~~Center~~Selling ~~designated~~Program initially byin both the U.S. ~~Citizen~~ and ~~Immigration~~China ~~Service~~and ~~(“USCIS”)~~then, asif ~~eligible~~ successful, to ~~receive~~expand ~~immigrant~~it ~~investor~~internationally. ~~capital~~As toa ~~promote~~result ~~economic~~of ~~growth~~Mr. Liu’s alleged actions, ~~improve~~as ~~regional~~described ~~productivity~~above, ~~create~~we ~~jobs,~~were ~~and~~forced ~~increase~~to ~~domestic capital~~suspend ~~investment.~~the ~~Our~~GX-Life ~~investment~~direct selling program in ~~Powerdyne~~the ~~allows~~fourth usquarter toof ~~expand~~2016. We are currently pursuing relationships with a number of sales organizations who can purchase our ~~business~~existing ~~scope~~inventory for resale purposes in an attempt to ~~real~~establish ~~estate~~a ~~development~~wholesale asrelationship wewith ~~have~~these ~~plans~~organizations. We believed that gaining consumer acceptance in this toway ~~raise~~would ~~funding~~allow ~~for~~us ~~qualified~~to ~~real~~overcome ~~estate~~any ~~development~~difficulties ~~projects~~encountered ~~within~~in ~~the~~our EBdirect-5selling ~~vehicle~~business.

~~The~~We ~~purchase~~were ~~price~~previously ~~for~~also ~~Powerdyne~~focused ~~was~~in ~~$250,000,~~the area of ~~which,~~EB-5 ~~$200,000 has~~investments ~~been~~for ~~paid~~foreign asinvestors ofwho ~~December~~are ~~31,~~interested ~~2015.~~in ~~$175,000~~acquiring oflawful ~~this~~permanent ~~was~~residence ~~contributed~~in bythe United States through our ~~former~~acquisition ~~CEO~~of ~~Lei~~Global ~~Pei.~~Future WeCity ~~paid~~Regional anCenter ~~additional~~LLC. ~~$25~~However,~~000~~ with the difficulties encountered because of Mr. Liu’s ondetention ~~October~~resulting 1,from ~~2015~~his alleged actions, ~~and~~we ~~the~~have ~~remaining~~begun ~~balance~~the process of ~~$50,000~~looking isinto alternative strategies to utilize or sell our EB-5 Regional Center. We may not be ~~paid~~able into ~~two~~utilize ~~installments~~or offind ~~$25,000~~a ~~which~~buyer ~~are~~for ~~due~~the onEB-5 ~~January 1,~~Regional ~~2016,~~Center and ~~April~~cannot 1,determine ~~2016~~at ~~(collectively~~this point ~~“Installment~~whether ~~Payments”)~~it has any value at all.

AsPrior ~~collateral~~Acquisitions ~~for the timely payment of the Installment Payments, we pledged~~ and ~~granted a security interest in the acquired membership interest of the Regional Center to the seller, until such time all Installment Payments have been made.~~Agreements

~~The~~We ~~purchase~~entered ofinto ~~Powerdyne~~the isfollowing ~~considered~~agreements ~~an asset purchase for accounting~~that ~~purposes~~helped ~~based~~pave onand ~~the~~shape ~~guidance~~our ~~of ASC 805 - Business Combinations, as the Regional Center does not have features of a~~ business ~~nor~~ ~~does~~in ~~it have any operations. Through this acquisition, we acquired the right to issue licenses to projects such that the projects will benefit from~~ its ~~regional~~current ~~center approved status.~~direction:

~~Form~~Sky ~~S-1~~Rover ~~Registration~~Stock ~~Statement~~Purchase Agreement

On ~~May 8~~April 17, 2015, we ~~filed~~completed athe ~~Form S-1 Registration Statement~~closing ~~under~~of ~~the~~a ~~Securities~~Stock ~~Act~~Purchase ofAgreement ~~1933~~ (the “~~S-1~~SPA”) with ~~the~~Sky ~~SEC~~Rover ~~for~~Holdings, ~~the~~Ltd., ~~initial~~a ~~registration~~corporation offormed 10under ~~million~~the ~~shares~~laws of ~~our common~~the ~~stock,~~Republic ~~and~~of onSeychelles ~~July~~(“Sky 6,Rover”). ~~2015,~~Under the ~~S-1~~SPA, ~~was~~certain ~~declared~~unaffiliated ~~effective~~parties by(collectively, the ~~SEC.~~“Acquiring Shareholders”) Oncumulatively ~~October~~acquired 8,approximately ~~2015,~~87.3% weof ~~submitted~~the aoutstanding ~~Post-Effective~~shares ~~Amendment No.~~of 1stock toof our ~~S-1~~Company ~~incorporating~~in ~~the~~exchange ~~new~~for our ~~information~~receipt ~~resulting~~of ~~from~~$400,000 ~~the~~in ~~GX-Life~~cash ~~Transactions~~ and ~~resignation~~the contribution of ~~our~~4,000,000 ~~former~~E-Gold ~~CEO, Lei~~crypto-assets ~~Pei.~~(“EGD”) ~~The~~to ~~Post-Effective~~our ~~Amendment~~then ~~No.~~wholly-owned subsidiary, 1Global ~~was~~Modern ~~declared~~Enterprise ~~effective~~Limited, bya ~~the~~Hong ~~SEC~~Kong onentity ~~October~~(the ~~19,~~“EGD ~~2015~~Subsidiary”). OnIn ~~December~~connection 2,with ~~2015,~~the ~~we submitted~~closing aof ~~Post-Effective~~the ~~Amendment~~SPA, NoMr. 2Lei toPei, ~~our~~an ~~S-1~~officer ~~incorporating~~of ~~certain~~Sky ~~information~~Rover, ~~contained~~purchased in6,000,000 ~~our~~newly-issued ~~Quarterly~~shares ~~Report~~of onour ~~Form~~common ~~10-Q~~stock for ~~the~~ ~~quarterly period ended September 30~~$3, ~~2015~~000,000 ~~that~~cash in ~~was~~a ~~filed~~separate ~~with~~transaction ~~the~~that ~~SEC~~closed on ~~November~~March 1730, 2015., ~~The~~which ~~Post-Effective~~was ~~Amendment No.~~meant 2to ~~was~~provide ~~declared~~working ~~effective~~capital byfor ~~the~~our ~~SEC~~business. onAdditionally, Mr. ~~December 22~~Pei, ~~2015.~~provided ~~The~~the ~~offering~~initial isdown ~~priced~~payment atof $~~3.50~~150,000 ~~per share. The S-1 has been qualified~~ for ~~sale~~the inacquisition ~~California~~of ~~and~~Global ~~New~~Future ~~York~~City ~~and~~Regional weCenter, ~~are~~LLC ~~free~~(f/k/a Powerdyne toRegional ~~sell~~Center, ~~under~~LLC) ~~the~~which ~~S-1~~is indescribed ~~those jurisdictions within the United States~~below. ~~Subsequent to~~On ~~December~~August 3117, 2015, weMr. ~~arranged for the sale of 1~~Pei,~~000,000~~ ~~shares~~resigned ~~under~~from ~~the~~our ~~S-1~~Company ~~for~~as aits ~~total~~Chief ~~of $3~~Executive Officer,~~500,000.~~ InChief ~~that~~Financial ~~regard,~~Officer ~~we have~~and ~~received $999~~Chairman,~~975~~ ~~to date~~ and wesold ~~are in~~ the ~~process~~6,000,000 ofshares ~~finalizing~~he ~~the~~owned ~~paperwork~~in ~~and~~our ~~remaining~~Company ~~funding~~in ~~with~~a ~~respect~~private ~~to the sale~~transaction.

~~Previous~~In ~~Business~~connection with the share purchase by Sky Rover, we intended to offer EGD in connection with a reward program (“Rewarded EGD”). We attempted to gain additional assurance that any sale or use of the EGD was in compliance with existing securities regulations, and on February 10, 2015, we filed a Request for No-Action relief (the “No-Action Request”) with the Securities and Exchange Commission (“SEC”) to obtain clarification that the SEC would not recommend enforcement action against us and our related subsidiaries regarding our use of the EGD. However, we were not able to obtain any such assurance or clarification, and we spun-off our EGD-related holdings on October 2, 2015 (as further explained below), and withdrew the No-Action Request on October 8, 2015.

Historically, we marketed and distributed three two-ounce energy shots, which are F.I.T.T. Energy for Life, F.I.T.T. Energy Extreme, and F.I.T.T. Energy Rx. We have retained the FITT energy drink division, and FITT is still operating as a business while we consider terrestrial and online marketing and distribution strategies for the FITT products. We intend to incorporate the sale of FITT energy drinks, under different names, into GX-Life’s consumer product sales business.

Description of Business

We are a holding company focused in the areas of (i) consumer product sales (through a membership program) and (ii) EB-5 investments. A discussion of each area is further described below:

CONSUMER PRODUCT SALES

We sell high quality consumer products such as personal care, wellness, and quality-of-life products under the brand, “GX-Life” via direct sales to consumers and e-commerce channels on an international basis. We acquired GX-Life, a business which has developed a robust, scalable network marketing platform which utilizes iMatrix’s software to support direct selling opportunities throughout the world. In January 2016, we began selling our products in certain areas of China, Taiwan and North America and selling directly to consumers through an e-commerce retail platform. Our objectives are to enrich the lives of those who use our products as well as enable our members to benefit financially from selling them.

GX-Life isShare ~~marketing~~Exchange a membership-based program in which a member may purchase an initial complement of 25 consumer products concentrated in the areas of beauty, nutrition, energy, and tea. In the beauty category, GX-Life has developed a line of high-end moisturizers, serums, and creams designed to protect the skin and combat the signs of aging. In the nutrition category, GX-Life offers a range of nutraceutical and diet products, including a multivitamin, probiotic, digestive enzyme, joint reliever, detoxifier, calcium supplement, and organic “superfood” powder. In the energy category, GX-Life offers F.I.T.T. Energy® two-ounce energy shots and one-ounce energy gel packs. In the tea category, GX-Life offers single-serve sachets of six Authentea® organic tea extracts, and three Herbalsoul® herbal tea extracts, in addition to various tea wares.Agreement

~~Below~~On isOctober 2, 2015, we completed a ~~list~~Share Exchange Agreement with GX-Life , whereby we spun-off 100% of ~~proprietary~~our ~~products~~ownership ~~currently~~interest ~~being~~in ~~offered~~the EGD Subsidiary (including the 4,000,000 EGD received under the SPA) in exchange for 100% of the outstanding common stock of GX-Life, a private company owned primarily by Ning Liu, and our CEO/CFO, Michael Dunn. GX-Life: has developed a platform to support direct-selling opportunities throughout the world (the “GX-Life Direct Selling Program”).

Category		Description
Beauty		AM Anti-Pollution Cream 30 mL (Airless Pump)
Beauty		Anti-Aging Eye Serum 15 mL (Airless Pump)
Beauty		Anti-Aging Face Serum 30 mL (Airless Pump)
Beauty		PM 72-hour Moisturizer 30 mL (Jar)
Beauty		Whitening/Dark Spot Corrector 30 mL (Airless Pump)
Nutrition		Liver Detox - Silybin 60 CT Softgels (Bottle)
Nutrition		Digestive Enzyme - Enzymax 60 CT Capsules (Blister)
Nutrition		Joint - Hyaloxin 60 CT Coated Caplets (Bottle)
Nutrition		Advanced Weight Loss 60CT Coated Time Release Caplets (Bottle)
Nutrition		Multivitamin - EnergyTon Plus 60 CT Softgels (Bottle)
Nutrition		Probiotic - EnteroPhilus 60 CT Vegetarian Capsules (Blister)
Nutrition		Organic “Superfood” Wild Berry 30 CT 8 g Stick Packs/Rectangular Packets (Box)
Nutrition		Resveratrol Sustain Nutrition Gel 30 CT 30 mL Gel Packs (Box)
Energy		F.I.T.T. Extreme Energy 12 CT 30 mL Gel Packs (Box)
Energy		F.I.T.T. Rx Energy Gel 30 CT 30 mL Gel Packs (Box)
Energy		Sustain 1 oz. Gel Packet (30)
Tea		6 Different Authentea Teas 30 CT 0.6 mL Sachets (Jar)
Tea		3 Herbalsoul Unique Products 30 CT 1.0 mL Sachets (Jar)
Tea		Longquan Celadon Tea Sets and Accessories

In a related transaction, on October 2, 2015, the former shareholders of GX-Life sold all of their interests in the EGD Subsidiary to the Acquiring Shareholders in the Sky Rover SPA in exchange for 21,280,000 shares of our Company’s common stock previously acquired in the Sky Rover SPA. Collectively, these two transactions are referred to as the “GX-Life Transactions”. As a result of the GX-Life Transactions, much of the Sky Rover SPA has been effectively unwound, as our Company (i) did not create three (3) of the four (4) subsidiaries it had intended to create under the SPA, (ii) did not receive the IP Technology that was intended to calculate Rewarded EGD, and (iii) no longer owns or controls the EGD Subsidiary or the 4,000,000 EGD crypto-assets it received under the Sky Rover SPA. Furthermore, of the four (4) entities that received shares in our Company (Future Continental Limited, Discover Future Limited, Global Future Development Limited, and Master Power Holdings Group), only Master Power Holdings Group retained the 9,120,000 shares it received under the Sky Rover SPA.

The GX-Life ~~currently~~Transactions ~~provides~~effected ~~its~~a ~~members~~change in ~~with~~control ~~the~~of ~~opportunity~~our toCompany, ~~purchase all-inclusive~~as ~~travel~~the ~~packages~~former ~~with~~shareholders ~~first~~of GX-~~class~~Life ~~air~~acquired ~~transportation~~21,280,000 ~~and~~shares ~~luxury~~of ~~hotel~~our ~~accommodations,~~common ~~and~~stock ~~fine~~representing ~~art~~an aggregate ~~from~~voting ~~the~~power ~~Japanese royal~~of ~~collection~~44.7%. Individually, following the GX-Life ~~also~~Transactions, ~~intends~~(i) toMichael ~~expand~~Dunn ~~its~~held ~~business~~a bytotal ~~offering~~of ~~lifestyle~~24.1% ~~products~~of ~~and~~the voting ~~services~~power ~~which~~of ~~include~~our ~~discounted plastic~~common ~~surgery~~stock, ~~medical~~(ii) ~~consultation~~Ning ~~and~~Liu ~~tourism~~held ~~packages~~a total of 2.6% ~~GX-Life~~of ~~will~~the ~~provide~~voting ~~its~~power ~~members~~of ~~with~~our ~~direct~~common ~~access~~stock, and ~~information~~(iii) Tomoe Masuya onheld a total of 32.9% of the ~~medical~~voting ~~professionals~~power ~~providing~~of ~~such~~our ~~services~~common ~~for~~stock. ~~members~~The ~~who~~former ~~wish~~shareholders toof ~~purchase~~GX-Life ~~this~~are ~~particular~~all ~~service~~unaffiliated from one another and disclaim status as a "group" as defined by SEC Rules under Section 13(d) of the Exchange Act.

~~More~~As ~~information~~described ~~about~~above, we had previously intended to market EGD in connection with a reward program. GX-Life ~~and~~believes that incorporating a crypto-asset other than EGD into a reward program would be important to GX-Life’s success. As a result, on October 21, 2015, GX-Life entered into a subscription agreement (the ~~products~~“Subscription Agreement”) with Great Coin. Great Coin is a technology development company that wefocuses ~~offer~~on ~~can~~the development of “GX Coins”, a cryptocurrency that functions as a store of value and medium of exchange, and the associated online cryptocurrency platform (the “GX Coin Platform”). Great Coin intends for GX Coins, as a cryptocurrency, to be tradable ~~found~~on the GX Coin Platform that is open to the public, and the ownership and transfer of GX Coins is intended to be recorded on an encrypted, distributed ledger system that is based on blockchain technology developed and made available by Ethereum Foundation, a Switzerland company (“Ethereum”). The software utilized by Ethereum to record GX Coin transactions on the GX Coin Platform is developed by third parties that are beyond the control of our ~~website~~Company, ~~at:~~its ~~www~~subsidiaries, or Great Coin, and may contain material defects and vulnerabilities.~~gx-life~~ In the event that Ethereum or its software changes, becomes obsolete, gets regulated adversely in one more jurisdictions, does not meet the expectations of its users, or suffers a breach in security, such event may have an adverse effect on the value of GX Coin and thereby our business.~~com~~

~~Marketing~~Great Coin has created seventy-five million (75,000,000) GX Coins using 256-bit encryption. To incorporate GX Coins into GX-Life's new business model, GX-Life originally agreed to purchase 5,000,000 GX Coins, at a price of $0.50 per GX Coin, for a total price of $2,500,000. In October 2015, GX-Life paid Great Coin $350,000 for 700,000 GX Coins under the Subscription Agreement. However, while Great Coin retained the $350,000 that was paid, the GX Coins were never delivered to GX-Life. Instead, the Subscription Agreement was superseded and ~~Distribution~~replaced on February 17, 2016 by a Software License and Services Agreement (the “Services Agreement”) between GX-Life and Great Coin, as amended on June 30, 2016 (the “Access and Services Agreement”). Under the Access and Services Agreement, GX-Life agreed to pay an upfront fee of ~~Consumer~~$350,000 ~~Products~~which was deemed paid by GX-Life's previous payment made to Great Coin in October 2015, and the remaining obligations under the Subscription Agreement were canceled. The material difference(s) between the License Agreement and Access and Services Agreement is that under the Access and Services Agreement, (i) GX-Life Members receive their entire commissions in the form of GX-Coins as stated in the conversion notice provided to GX-Life rather than receiving their entire commissions in the form of GX-Coins over the course of twenty weeks, and (ii) clarifies that the conversion fee paid by GX-Life to Great Coin shall be calculated without any reference to any discounts, rewards, or incentives that a GX-Life Member may receive under the GX-Life Global Compensation Plan.

~~Sponsorship~~Under the Access and Services Agreement, Great Coin has agreed to make available and manage the GX Coin Platform, in connection with which GX-Life Members will be able to receive their commissions in the form of either a debit card, Automatic Clearing House (“ACH”) deposit, or GX Coins. The GX Coin Platform will also allow GX-Life Members to sell GX Coins to other users of the GX Coin Platform, including the public and other GX-Life Members.

All new GX-Life members initially enroll in our direct selling programs at a standard level. After being enrolled at a standard level, each member may choose to increase their status to a VIP status level of Gold, Platinum, Diamond, or Jade. Members enrolling within the network may purchase our products solely for their own personal consumption, for resale, or both. Newly enrolled members are assigned into network positions that can be “under” other members, which is referred to as “down-line”. Down-line members can also enroll new members creating additional levels within the structure. We do not pay any commissions for members enrolling new members.

People seeking new opportunities for income can build a network of members and product users. Financial incentives are provided by GX-Life to those who succeed in building their member network. However, members are not required to enroll other members as their down-line member. Members receive product samples, brochures, and other sales materials from GX-Life but members are primarily responsible for enrolling and educating their new down-line members with respect to our products, compensation plan, and how to build a successful membership network. People are often attracted to become members after using our products or after attending introductory seminars. Members are able to purchase products directly from us at wholesale prices via the internet.

~~Compensation~~Acquisition ~~Plans~~of Global Future City Regional Center, LLC (formerly, Powerdyne Regional Center, LLC)

~~Under~~On ~~our~~March ~~compensation plan~~26, ~~standard members do not earn sales commissions on their down-line members’ product sales~~2015, ~~but~~we ~~can~~entered ~~earn~~into a ~~commission on the sale of certain products. VIP members~~Membership ~~may~~Interest ~~earn~~Purchase ~~sales commissions on their down-line members’ product sales. VIP members (~~and ~~standard~~Sale ~~members~~Agreement ~~for~~ (the ~~sale~~“Membership ~~of certain products~~PSA”) ~~are~~with ~~paid~~Powerdyne, ~~weekly~~Inc. ~~commissions in~~ (the ~~form~~“Selling ~~of reward points for product sales purchased by a member’s down-line member network across all geographic markets~~Entity”), ~~except China, where our subsidiary maintains~~ an ~~e-commerce~~entity ~~retail~~which ~~platform~~owned ~~and~~100% ~~does~~of ~~not pay~~the ~~any~~membership ~~commissions.~~interests ~~Our unique compensation plan enables a member located~~ in ~~one~~Powerdyne ~~country~~Regional toCenter, ~~sponsor~~LLC ~~other~~(“Powerdyne” ~~members~~or ~~located in other~~“Regional ~~countries~~Center”). ~~VIP~~Powerdyne ~~members~~is ~~also~~an ~~have~~EB-5 ~~the~~Regional ~~exclusive~~Center ~~opportunity~~(USCIS toID ~~earn~~Number ~~overriding~~1215250671) ~~commissions~~that onwas ~~the~~approved ~~product sales of members up to three levels below them~~ on ~~their~~March ~~trees.~~28, ~~Overriding~~2013 ~~commissions~~by ~~for~~the ~~VIP member’s range from 0~~U.~~65% to 35% of sales volume depending~~S. onCitizen ~~status level~~ and ~~position~~Immigration inService ~~his/her tree~~(“USCIS”). ~~Commissions~~The ~~are~~closing ~~accrued~~(“Closing”) onof ~~a daily basis in~~ the ~~form~~Membership ofPSA ~~reward~~occurred ~~points,~~on ~~which are~~March ~~redeemable for cash (subject to certain limitations)~~27, ~~additional products, or GX Coins~~2015.

AsUnder the ~~member’s~~terms ~~business~~of ~~expands~~the orMembership ~~his/her~~PSA, ~~VIP~~we ~~status~~purchased 100% ~~level~~of the membership interest of Powerdyne (the “Purchased Membership Interest”) from the Selling Entity for the ~~increases~~total purchase price of $250,000 (the ~~member~~“Purchase ~~receives~~Price”) ~~higher~~of ~~commissions~~which ~~payouts~~$125,000 ~~from~~(the ~~purchases~~“Deposit”) ~~made~~was paid by ~~their~~us at ~~expanding~~the ~~down-line~~Closing ~~network.~~with Tothe balance to be ~~eligible~~paid in five (5) quarterly installments of $25,000 (the “Installment Payments”) todue ~~receive~~on ~~commissions~~April 1, a2015, ~~member~~July ~~may~~1, be2015, ~~required~~October to1, ~~make~~2015, ~~nominal~~January ~~periodic~~1, ~~purchases~~2016, ofand ~~our~~April ~~products~~1, 2016. ~~Commission~~As ~~increases~~collateral ~~occur when~~for the ~~number~~timely payment of the ~~levels~~Installment ofPayments, ~~down-line~~we ~~members~~pledged ~~included~~and ~~within~~granted a security interest in the ~~member’s~~Purchased ~~commissionable~~Membership ~~group~~Interest ~~increases~~of ~~and~~Powerdyne to the ~~number~~Selling ofEntity, ~~memberships~~until ~~directly~~the ~~below~~Purchase Price was paid in full. As of the ~~member~~date ~~increases~~of this filing, all remaining payments have been made for total payments of $250,000.

~~From~~Shortly ~~time~~after tothe ~~time~~Closing, we ~~may~~submitted ~~make modifications and enhancements to~~an ~~our~~Amendment ~~compensation plan~~ to ~~help~~Articles ~~motivate~~of ~~our~~Organization ~~members.~~(the We“Amended ~~may~~Articles”) ~~also~~of ~~enter~~Powerdyne ~~into~~to ~~agreements~~change ~~for~~its ~~business~~name orto ~~market~~“Global ~~development, which~~Future ~~may~~City ~~result~~Regional inCenter, ~~additional~~LLC” ~~compensation~~ to ~~specific~~better ~~members.~~align Weits ~~intend~~identity ~~to continue to examine~~ and ~~adjust~~brand ~~our~~with ~~member~~the ~~compensation plan~~public tocompany. ~~reflect~~Such ~~market~~Amended ~~place~~Articles ~~competition,~~was ~~demand,~~ filed and ~~U.S.~~approved ~~regulations~~by ~~and~~the ~~foreign~~California ~~jurisdictions.~~Secretary ~~Because~~ of ~~this,~~State weon ~~recognize that~~April we9, ~~may have different compensation plans for different jurisdictions~~2015.

GXAs ~~Coin~~discussed ~~Rewards~~above, due to the difficulties encountered because of Mr. Liu’s detention resulting from his alleged actions, we have commenced looking at alternative strategies to utilize or sell our interest in Powerdyne. However, because of the inactivity of the Regional Center, the USCIS has considered the project frozen, and accordingly, the value it may have to a third party may minimal until conditions change.

~~Incorporating~~Prior ~~the~~Operations GX Coin into our reward program structure differentiates us from other direct selling companies and is an integral part of our business plan. GX Coin is a form of digital currency that is intended to be traded on an online platform where the price of GX-~~Coin~~ ~~may~~FITT ~~fluctuate depending on traditional market forces.~~Energy

~~Our members can acquire GX Coins by converting status or reward points into GX Coins. A member can choose their VIP membership status level~~Historically, ~~ranging~~we ~~from~~marketed ~~Gold~~and ~~($1,500),~~distributed ~~Platinum ($10~~three,~~000), Diamond~~ ~~($50,000),~~two-ounce orenergy ~~Jade~~drink ~~($250,000)~~shots tomarketed ~~acquire~~under ~~status~~the ~~points~~FITT ~~that~~Energy ~~can then be converted into GX Coins at any time~~brand. ~~The~~All ~~member’s VIP~~three ~~status~~energy ~~level~~shots ~~will~~were ~~remain~~designed ~~constant~~in ~~for~~collaboration ~~the~~with ~~following 12 months unless the member elects to convert status points into GX Coins~~Dr. orRand ~~acquire~~Scott, ~~additional~~a ~~status~~Board ~~points.~~Certified AAnesthesiologist ~~member~~and ~~may~~Pain ~~choose~~Management ~~any~~Specialist ~~VIP~~who ~~membership~~has ~~status~~experience ~~level~~with ~~for each subsequent 12-month period and acquire additional GX Coins corresponding to~~ the ~~status~~use ~~level~~of ~~chosen.~~herbal ~~Members earn reward points from his/her sales commissions~~products. ~~which~~At ~~may be converted into GX Coins. Under~~ the ~~terms~~recommendation of ~~the~~Dr. ~~Software License Agreement~~Scott, ~~when~~we incorporated a ~~member~~number ~~converts~~of ~~his/her~~ingredients ~~status or rewards points~~ into ~~GX Coins, we will record operating income, excluding~~ the ~~conversion~~FITT ~~fee~~Energy ~~payable~~products to ~~Great~~reduce ~~Coin,~~the ~~equal to~~amount ~~80%~~ of ~~the~~caffeine ~~conversion amount, up to $4,000,000~~ in ~~total~~each ~~conversion amounts, and 50% of the conversion amount thereafter~~product.

~~Members~~Although ~~who~~we ~~acquire~~have GXimplemented ~~Coins~~new ~~can~~business ~~(i)~~operations as ~~keep~~outlined ~~the~~above, GXwe ~~Coins,~~have ~~(ii)~~retained ~~sell~~ the GXFITT ~~Coins~~Energy ~~for~~drink ~~cash~~brand by ~~utilizing~~incorporating the ~~trading~~sale ~~platform~~of ~~developed~~FITT byenergy ~~Great~~drinks ~~Coin,~~into ~~(iii) or use~~ the GX ~~Coins to purchase products offered by GX~~-Life. direct-selling Aprogram ~~member~~as ~~can~~well ~~utilize~~as ~~Great Coin’s trading platform by signing up for an account by following~~ the ~~easy steps illustrated~~ online. ~~Once~~program a GX Coin account is established, a unique and secure digital wallet that stores GX Coins will be issued. Upon Great Coins’ administrative review and registration approval, the account can be used to start selling ~~(or~~direct buying) GX Coins. Great Coin’s highly secure trading platform utilizes an advanced Ethereum blockchain technology that records GX Coin transactions on a 256-bit encrypted and secure ledger that is also used in bank transactions which provides the safest way to ~~store money and GX Coins~~consumers.

AsCurrent ofBusiness ~~March 15, 2016, Great Coin began accepting applications for electronic wallets and anticipates the commencement of operations on its trading platform in May 2016.~~Operations

~~More~~GX-Life ~~information~~Operations ~~about~~(Consumer ~~Great Coin and its trading platform can be found at: www.gx-coin.com.~~Products)

~~Member~~GX-Life ~~Support~~is our wholly-owned subsidiary selling a variety of consumer products which are described below. GX-Life began offering its products using a direct-selling platform to support sales opportunities throughout the world (the “GX-Life Direct Selling Program”). The GX-Life Direct Selling Program incorporated the use of GX Coins to allow its members to receive rewards, commissions and other forms of compensation. During the fourth quarter of 2016, we suspended the GX-Life Direct Selling Program due to difficulties resulting from Mr. Liu’s detention, as previously described. We may decide to reactivate this program in the future, but such reactivation cannot be assured.

WeIn ~~are~~its ~~committed~~place, towe ~~providing~~retained a ~~high~~consulting ~~level of support services tailored~~firm towith ~~the~~significant ~~needs~~experience ~~of our members~~ in ~~each~~online ~~marketplace~~sales ~~we are serving. We attempt~~ to ~~meet~~help ~~the~~us ~~needs~~develop ~~and~~an ~~build~~online ~~the loyalty of members by providing personalized member services through our world~~direct-~~wide strategic partnership with Global Access and a 24/7 client service call center. We also maintain a prompt and easy-~~to-~~use~~consumer ~~product~~sales ~~return~~program ~~policy~~ (~~see~~ “~~Product~~GX-Life ~~Warranties~~D2C ~~and Returns~~Program”). Weto ~~believe~~sell ~~that~~our ~~maximizing~~products. aAfter ~~member’s~~spending ~~efforts~~considerable byresources ~~providing~~in ~~effective~~connection ~~member~~with ~~support~~this isprogram, ~~the~~we ~~hallmark~~were ofunable ~~our~~to ~~network~~generate ~~marketing~~any appreciable ~~system~~results ~~that~~and ~~helps~~have ~~members~~now ~~build~~abandoned athis ~~profitable~~potential ~~business~~sales ~~supports our success~~avenue.

We ~~seek~~are tocurrently ~~understand~~pursuing ~~and~~relationships ~~satisfy~~with a ~~the~~number ~~needs~~ of sales organizations who can purchase our ~~members~~existing ~~through~~inventory for resale purposes in an attempt to establish a wholesale ~~product~~relationship ~~training~~with ~~meetings,~~these ~~regular~~organizations ~~conventions,~~as ~~web-based~~well ~~messages,~~as ~~member~~liquidate ~~focus~~large ~~groups,~~quantities ~~regular~~of ~~telephone~~inventory ~~conference~~to ~~calls~~extract ~~and~~value before certain of the ~~other~~product ~~personal~~reach ~~contacts~~an ~~with~~expiration ~~members~~date. ~~Our~~Given ~~user-friendly~~the ~~websites~~damage ~~provide~~done ~~product~~to ~~fulfillment~~our ~~and~~Company’s ~~tracking~~credibility ~~services~~by ~~that~~Mr. ~~result~~Liu’s actions and detention, inthere ~~timely~~is ~~product~~no ~~distribution~~assurance that ~~builds~~we ~~members’~~will ~~reputation~~be ~~and~~successful ~~highly~~in ~~rated~~this ~~customer satisfaction~~endeavor.

GX-Life Products

Below is a list of products offered by GX-Life. These products were formulated mainly for the market in China and packaged with our direct selling program in mind.

To help maintain communication with our members, we expect to offer the following support programs:

Category	Description
Beauty	Fruit Enzyme Foaming Cleanser 100mL (Tube)
Beauty	Moisture-Boosting Night Repair Cream 30mL (Jar)
Beauty	Line-Diffusing Diamond Eye Cream 15mL (Airless Pump)
Beauty	Regenerative Multi-Action Concentrate 30mL (Airless Pump)
Beauty	Skin-Brightening Diamond Illuminator 30mL (Airless Pump)
Nutrition/Supplements	GX-Life Slim Down 60 CT Caplets (Bottle)
Nutrition/Supplements	GX-Life Super Berry Shake 9.4oz Powder (Canister)
Nutrition/Supplements	GX-Life Multi-Vitamin 60 CT Softgels (Bottle)
Nutrition/Supplements	GX-Life Joint Support 60 CT Tablets (Bottle)
Nutrition/Supplements	GX-Life DetoxMax 60 CT Softgels (Bottle)
Nutrition/Supplements	GX-Life Enzymax 60 CT Capsules (Bottle)
Nutrition/Supplements	GX-Life Advanced Probiotics 60 CT Vegetarian Capsules (Bottle)
Energy Drink	GX-Life Sustain 1 oz. Gel Packet (30 CT) (Box)
Energy Drink	GX-Life F.I.T.T. Extreme 12 CT 30 mL Gel Packs (Box)
Energy Drink	GX-Life F.I.T.T. Rx Gel 30 CT 30 mL Gel Packs (Box)
Tea	Herbal Soul Super Clearance 30 Ct 1.0mL Sachets (Jar)
Tea	Herbal Soul Mag Health 30 CT 1.0mL Sachets (Jar)
Tea	Herbal Soul NuDibe 30 CT 1.0mL Sachets (Jar)
Tea	Authentea Assortment Pack 30 CT 0.6mL Sachets (Tin Box)
Tea	Authentea Jasmine 30 CT 0.6mL Sachets (Jar)
Tea	Authentea Apple Iced Green 30 CT 0.6mL Sachets (Jar)
Tea	Authentea Peach Iced Green 30 CT 0.6mL Sachets (Jar)
Tea	Authentea Blueberry Black 30 CT 0.6mL Sachets (Jar)
Tea	Authentea Organic Black 30 CT 0.6mL Sachets (Jar)
Tea	Authentea Organic Green 30 CT 0.6mL Sachets (Jar)
Teaware	10 Piece Tea Set
Teaware	8 Piece Tea Set
Teaware	7 Piece Tea Set

· Teleconferences – teleconferences with associate field leadership on various subjects such as technical product discussions, member organization building and management techniques. · Internet – we maintain a website at www.gxGX-~~life.com.~~Life Onoffers ~~this~~high ~~website,~~quality ~~the~~consumer ~~user can read company news, learn more about various~~ products, concentrated ~~sign~~in ~~up to be a member, place orders, and track~~ the ~~fulfillment~~areas ~~and delivery~~ of ~~their orders. · Product Literature – a variety of literature to members~~beauty, ~~including product catalogs~~nutrition, ~~informational~~energy ~~brochures~~drinks, ~~pamphlets~~ and ~~posters~~tea ~~for~~under ~~individual~~the ~~products~~brand, ~~which are both printed and available online~~“GX-Life”. ·Products ~~Broadcast~~have ~~E-mail~~historically been ~~and~~sold ~~Text Messages – announcements will be sent~~ via eGX-~~mail~~Life’s ~~and/or~~Direct ~~text~~Selling ~~messages~~Program to ~~members~~GX-Life ~~who~~Members ~~opt~~and inconsumers toand ~~receive~~e-commerce ~~this~~channels ~~form~~on ofan ~~communication~~international basis. ·During ~~Social~~the ~~Media~~fourth ~~Tools~~quarter –of in2016, ~~some countries~~ we ~~will~~suspended ~~maintain~~the ~~country~~GX-~~specific~~Life ~~social~~Direct ~~media~~Selling ~~sites~~Program toand ~~foster~~are apursuing ~~community~~wholesale ~~environment around our product offering and business opportunity~~avenues.

~~Technology~~GX-Life obtains its beauty products of high-end moisturizers, serums, and ~~Internet~~creams ~~Initiatives~~designed to protect the skin and combat the signs of aging from Advanced Medical Research Laboratories, Inc. (“AMR”). AMR is a health and beauty contract manufacturer that creates beauty product formulas using the latest innovations in active ingredients. In this regard, GX-Life uses AMR’s services to create unique beauty formulas for all of GX-Life’s beauty products, including its foaming cleanser, night cream, eye cream, regenerative pump, and skin pump, and tailors each beauty product’s look, feel, bottling, labeling, and packaging according to GX-Life’s instructions. After a finished product is made, GX-Life places purchases orders to AMR to acquire beauty product inventory that GX-Life sells to its customers.

WeIn ~~believe~~a ~~that~~similar ~~the~~fashion ~~internet is important~~ to ~~our~~GX-Life’s ~~business as more~~beauty ~~consumers~~products, ~~communicate~~GX-Life ~~online~~obtains ~~and~~its ~~purchase~~nutraceutical products ~~over~~from ~~the~~VFR ~~internet~~Import asExport, ~~opposed~~Inc to(“VFR”). ~~traditional~~VFR ~~retail~~is ~~and~~a ~~direct~~vitamin ~~sales~~and ~~channels.~~supplement Ascontract amanufacturer. ~~result,~~In wethis ~~have~~regard, ~~committed significant resources to our e~~GX-~~commerce~~Life ~~capabilities,~~uses ~~and~~VFR’s ~~the~~services ~~abilities of our members~~ to ~~take~~create ~~advantage of~~unique ~~the~~formulas ~~internet~~for asall ~~most~~ of ~~our~~GX-Life’s ~~sales~~nutraceutical products, ~~take~~including ~~place~~its ~~via~~slim ~~the~~down ~~internet.~~caplets, Weberry ~~offer~~shake, amulti-vitamin, ~~global~~joint ~~web~~tablets, ~~page~~detox ~~that~~softgels, ~~allows~~enxymas acapsules, ~~member~~and toprobiotic capsules, ~~have~~and atailors ~~personalized replicating~~each ~~website~~nutraceutical ~~through~~product’s ~~which~~taste, helabeling, orbottling, ~~she~~and ~~can~~packaging ~~sell~~according ~~products~~to inGX-Life’s instructions. ~~all~~After ofa ~~the~~finished ~~countries~~product inis ~~which~~made, weGX-Life doplaces ~~business.~~purchases ~~Links~~orders to ~~these~~VFR ~~websites can~~to beacquire ~~found~~nutraceutical atproduct ~~our~~inventory that ~~main~~GX-Life ~~website~~sells ~~for~~to ~~members~~its ~~at www~~customers.~~gx-life.com.~~

~~Member~~Unlike ~~Ethics~~GX-Life’s ~~Policy~~beauty and nutraceutical products, GX-Life created the formulas for its energy drink products which include GX-Life Sustain, GX-Life F.I.T.T. Extreme, and GX-Life F.I.T.T. Rx Gel packs in collaboration with Dr. Rand Scott. GX-Life provides Universal Nutrients, LLC, a contract manufacturer (“Universal Nutrients”), the raw materials, formulas, and instructions needed to create each energy drink. In order to obtain energy drink products, GX-Life merely places a purchase order and provides the raw materials to Universal Nutrients to create the energy drink product that GX-Life then sells to its customers.

Our member policies and procedures establish the standards by which members conduct GX-Life business in each market. We communicate with members regarding business activities in an attempt to provide our members with a “level playing field” so that one member may not be disadvantaged by the activities of another. We expect the highest level of professional conduct by our members to present products and business opportunities in an ethical and professional manner. Members are expected to become fully educated of our products they sell so that any presentations to customers are consistent with, and limited to, the product claims and representations made in our literature.

Our policies and procedures state that we produce or pre-approve all sales aids used by members such as presentations videotapes, audiotapes, brochures and promotional clothing. Further, members may not use any form of media advertising to promote products unless it is pre-approved by us. Members are not entitled to use our trademarks or other intellectual property without our prior consent.

Our compliance and member services department reviews reports of alleged member misbehavior. If we determine that a member has violated our member policies or procedures, we may terminate the member’s rights completely or take other remedial actions, such as warnings, probation, withdrawal or denial of an award, suspension of privileges of the membership, fines, withholding commissions, until specified conditions are satisfied or other appropriate injunctive relief. Our members are independent contractors, not employees, and may act independently of us. Further, our members may resign or terminate their membership at any time without notice. See “Item 1A. Risk Factors.”

Government Regulations – Consumer Products

Direct Selling Activities

Direct selling activities are regulated by various federal, state and local governmental agencies in the United States and other countries. These laws and regulations are generally intended to prevent fraudulent or deceptive schemes. The laws and regulations in our current markets often:

· impose cancellation/product return, inventory buy-backs and cooling-off rights for consumers and members; · require us or our members to obtain a license from, or register with, governmental agencies; · impose reporting requirements; and

· impose requirements upon us, such as requiring members to maintain levels of retail sales to qualify to receive commissions, to ensure that members are being compensated for sales of products and not for recruiting new members.

The laws and regulations governing direct selling are modified from time to time, and, like other direct selling companies, we may be subject from time to time to government reviews, examinations or investigations in our various markets related to our direct selling activities. This can require us to make changes to our business model and aspects of our global compensation plan in the markets impacted by such changes and examinations.

~~Based~~GX-Life onobtains ~~advice~~its oftea ~~our~~products ~~engaged~~from ~~outside~~Guangdong Authenmole ~~professionals~~Biotech, inInc. ~~existing markets~~(“Authenmole”), ~~the~~a ~~nature~~tea ~~and~~manufacturer ~~scope~~located ofin ~~inquiries~~the ~~from~~People’s ~~government~~Republic ~~regulatory~~of ~~authorities~~China, ~~and~~to ~~our~~provide single-serve ~~history~~sachets of ~~operations~~six inAuthentea® ~~those~~organic ~~markets to~~tea ~~date~~extracts, weand ~~believe~~three ~~our~~Herbalsoul ~~method~~herbal oftea ~~distribution~~extracts, ~~complies~~ in ~~all~~addition ~~material~~to ~~respects~~various teawares. ~~with~~GX-Life ~~the~~has ~~laws~~no ~~and~~input ~~regulations~~on ~~related~~these toproducts ~~direct selling~~as GX-Life merely acts as a reseller of the ~~countries~~tea inproducts ~~which~~manufactured weand ~~currently~~produced by ~~operate~~Authenmole.

~~Selling~~More ~~Activities~~information inabout ~~China~~GX-Life and the products that it offers can be found on our website at: www.gx-life.com

~~At the end of 2005, China adopted new direct selling and anti~~GX-~~pyramiding regulations~~Life ~~that are restrictive and contain various limitations, including a restriction on the ability to pay multi~~Direct-~~level~~Selling ~~compensation to independent members. The Chinese government continues to scrutinize the activities of direct selling companies.~~Program

~~However,~~The weGX-Life doDirect ~~not~~Selling ~~conduct~~Program ~~direct~~was ~~selling in China. Rather, consumers~~developed ~~and~~to ~~members~~support ~~purchase~~sales ~~our~~opportunities ~~products~~throughout ~~via~~the ~~our~~world. ~~Hong~~Under ~~Kong-based~~the ~~website~~program, orenrolled ~~our~~members ~~e-commerce~~received ~~retail~~various ~~platform~~benefits independing ~~China. We believe that neither~~on ~~our~~their ~~Hong~~enrolled ~~Kong-~~status (based ~~website~~on ~~nor~~each ~~our~~member’s ~~e-commerce~~deposit). ~~platform~~Benefits inwere ~~China~~calculated ~~require~~under a ~~direct~~compensation ~~selling~~plan ~~license in China,~~ which wewas ~~currently~~based doon ~~not~~most ~~hold.~~recent Ifindustry wedevelopments ~~are~~and ~~able~~best topractices ~~obtain~~for a direct selling ~~license in China~~programs, weand ~~believe~~benefits ~~that~~included ~~the~~product ~~incentives~~discounts, ~~inherent in the direct~~bonuses, ~~selling~~commissions, ~~model in China would incrementally benefit our existing business~~etc. ~~Increased~~Our ~~sales~~program inalso ~~China~~incorporated ~~that could be derived from obtaining a direct selling license may be partially offset by~~ the ~~higher~~use ~~fixed~~of ~~costs~~GX ~~associated~~Coins ~~with~~as ~~the~~part ~~establishment and maintenance~~ of ~~required~~ ~~service~~an ~~centers~~award ~~and branch offices~~structure. We are unable to predict whether and when we will be successful in obtaining a direct selling license to operate in China, and if we are successful, when we will be permitted to conduct direct selling operations and whether such operations would be profitable.

~~The~~During ~~regulatory~~the ~~environment~~fourth inquarter ~~China~~of ~~is complex~~2016, ~~and~~we ~~our operations~~suspended inthe ~~China~~GX-Life ~~can~~Direct ~~receive~~Selling ~~regulatory~~Program ~~and~~due ~~potential~~to ~~media~~difficulties ~~attention.~~resulting ~~Our~~from ~~business~~Mr. ~~continues~~Liu’s todetention, beas ~~subject~~previously todescribed, ~~regulations~~ and ~~examinations~~we bymay ~~municipal~~or ~~and~~may ~~provincial~~not ~~level~~reactivate ~~regulators~~the program in ~~China~~the future. ~~However,~~If nowe ~~material~~reactivate ~~changes~~the ~~to our business model have been required so far~~program, ~~and~~ we ~~expect~~will toagain ~~receive~~be ~~continued~~subject ~~guidance~~to ~~and~~all ~~direction~~regulations, both ~~as we work with~~ foreign ~~counsel to address our business model~~ and ~~any~~ ~~changes~~domestic, ~~that~~governing ~~need to be made to comply with the~~ direct selling ~~regulations~~programs.

~~Regulation~~Prior to the suspension of ~~Our~~the ~~Products~~GX-Life –Direct Selling ~~United~~Program, ~~States~~members had made deposits, net of repayments, of $5.2 million into the program, $4.7 million of which was converted into GX Coins in accordance with the terms of a February 17, 2016 License Agreement between GX-Life and ~~Overseas~~Great Coin. The amount not converted into GX Coins, approximately $551,000, is reflected in Member Deposits as a current liability on our consolidated Balance Sheet at December 31, 2016.

~~Our~~As ~~products~~of ~~and~~December ~~related~~31, ~~promotional~~2016, ~~and~~GX-Life ~~marketing~~had ~~activities~~111 ~~are~~accounts ~~subject~~established tounder ~~extensive~~this ~~governmental~~program, ~~regulation~~66 byof ~~numerous~~which ~~governmental~~were ~~agencies~~held ~~and~~by ~~authorities~~residents inof ~~the~~China ~~United~~and ~~States, including~~ the ~~U.S.~~remainder ~~Food~~by ~~and~~residents ~~Drug~~of ~~Administration (~~the ~~“FDA”),~~United ~~the~~States. With ~~Federal Trade Commission (~~the ~~“FTC”),~~exception ~~the~~of ~~Consumer Product~~repayment ~~Safety~~of ~~Commission,~~ the ~~United~~Member ~~States~~Deposit ~~Department~~current ofliability ~~Agriculture,~~described ~~State Attorneys General~~above, ~~and~~we ~~other~~have ~~state~~met ~~regulatory~~all ~~agencies. In~~of our ~~foreign~~obligations ~~markets,~~ to the ~~products~~program’s ~~are~~account ~~generally~~holders ~~regulated~~due byto ~~similar~~the ~~government~~suspension ~~agencies~~of the program.

~~Our~~GX personal care products are subject to various laws and regulations that regulate cosmetic products and set forth regulations for determining whether a product can be marketed as a “cosmetic” or requires further approval as an over-the-counter (“OTC”) drug. In the United States, regulation of cosmetics is under the jurisdiction of the FDA. The Food, Drug and Cosmetic Act defines cosmetics by their intended use, as “articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body . . . for cleansing, beautifying, promoting attractiveness, or altering the appearance.” Among the products included in this definition are skin moisturizers, eye and facial makeup preparations, perfumes, lipsticks, fingernail polishes, shampoos, permanent waves, hair colors, toothpastes and deodorants, as well as any material intended for use as a component of a cosmetic product. Conversely, a product will not be considered a cosmetic, but may be considered a drug if it is intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease, or is intended to affect the structure or any function of the body. A product’s intended use can be inferred from marketing or product claims. The other markets in which we operate have similar regulations. In China, personal care products are placed into one of two categories, “general” and “drug.” Products in both categories require submission of formulas and other information with the health authorities, and drug products require human clinical studies. The product registration process in China for these products can take from nine to more than 18 months or longer. Such regulations in any given market can limit our ability to import products and can delay product launches as we go through the registration and approval process for those products.Coins

~~The~~GX-Life ~~markets~~entered ininto ~~which~~an weAccess ~~operate~~and ~~all~~Services Agreement ~~have~~(see ~~varied~~discussion ~~regulations~~above) with Great Coin that ~~distinguish~~ ~~foods~~would ~~and~~allow ~~nutritional~~GX-Life ~~health~~to ~~supplements~~distribute ~~from~~rewards ~~“drugs”~~to orGX-Life ~~“pharmaceutical~~Members ~~products.” Because~~in the form of ~~the~~GX ~~varied~~Coins. ~~regulations,~~GX ~~some~~Coin ~~products~~is ora ~~ingredients~~cryptocurrency that ~~are~~functions ~~recognized~~ as a ~~“food”~~store inof ~~certain~~value ~~markets~~and ~~may~~medium beof ~~treated as~~exchange athat ~~“pharmaceutical”~~was increated ~~other~~by ~~markets. These~~Great ~~regulations~~Coin and ~~may~~is ~~require~~intended us to ~~either~~be ~~modify~~traded aon ~~product~~the orGX ~~refrain from~~Coin ~~selling~~Platform, where the ~~product~~price inof aGX ~~given~~Coin ~~market.~~may Asfluctuate adepending ~~result,~~on wetraditional ~~must~~market forces. ~~regularly~~GX-Life ~~modify~~intends ~~the~~to ~~ingredients~~use ~~and/or~~GX ~~the~~Coins ~~levels~~as part of ~~ingredients in~~the ~~our~~GX-Life ~~products~~Global Compensation Plan for ~~certain~~GX-Life ~~markets~~Members. In ~~some~~order ~~circumstances,~~to ~~the~~qualify for ~~regulations~~GX inCoin ~~foreign~~related ~~markets~~benefits, ~~may~~receive ~~require~~GX-Coins, usor toparticipate ~~obtain regulatory~~on ~~approval~~the ~~prior~~GX-Coin toPlatform (collectively, the ~~introduction~~“GX-Coin ofBenefits”), GX-Life aMembers ~~new~~must ~~product~~reside in a state or ~~limit~~territory ~~our~~where ~~uses~~Great ofCoin ~~certain~~is ~~ingredients~~approved ~~altogether~~and authorized to conduct business. ~~There~~ Currently, ~~has~~only ~~been~~GX-Life anMembers ~~increased~~who ~~movement~~reside in California are eligible to receive the GX-Coin Benefits within the United States. ~~and~~GX-Life ~~other~~Members who ~~markets~~reside toin ~~expand~~China ~~the~~may ~~regulation~~receive ofGX-Coin ~~dietary~~Benefits ~~supplements~~as well. ~~This~~All ~~could impose~~other ~~additional~~GX-Life ~~restrictions~~Members that reside outside of California or ~~requirements~~China will not be eligible to receive GX-Coin Benefits, and must receive their commissions in the ~~future.~~form ~~Because~~ of ~~this~~a ~~increased~~debit ~~regulatory~~card ~~focus,~~or ~~our~~ACH ~~internal~~deposit ~~review~~until ~~efforts~~Great ~~have~~Coin ~~been~~is ~~enhanced~~approved inand ~~order~~authorized to ~~comply~~conduct ~~with~~business ~~our~~in ~~understanding~~the ofstate ~~current~~or ~~regulations~~territory where such GX-Life Member resides.

GX-Life Direct-to-Consumer Program

After suspending our Direct Selling Program in the fourth quarter of 2016, we retained a consulting firm, Digital Market Labs (“DML”), to help us develop an online direct-to-consumer sales program (“GX-Life D2C Program”) to sell our products. DML has significant experience in online sales and had developed numerous similar programs for other clients in the past. Based on their prior experience, DML stated that we should expect an approximate 1.5% conversion ratio for each online target. During a three-month period from late 2016 to early 2017 we focused a significant portion of our resources to redesigning our products’ packaging and advertising for the online consumer and, in the end, our results were minimal. We have since abandoned this effort due to DML’s estimated sales estimates not being met. As a result, we were forced to lay off a majority of our employees in January 2017 to reduce costs to a minimal level.

GX-Life Wholesale Program

We currently are pursuing relationships with a number of sales organizations who can purchase our existing inventory for resale purposes in an attempt to establish a wholesale relationship with these organizations. This would allow us to take advantage of established sales networks and, if successful, create a sustainable stream of revenue. We believe this approach gives us the best opportunity for future success at the least cost. There is no assurance that we will be successful in this endeavor.

~~FDA~~Regulation ~~regulations~~of ~~require~~GX-Life’s ~~current~~Products ~~good manufacturing practices~~– ~~(“cGMP”)~~United ~~for~~States ~~dietary supplements. The regulations ensure that dietary supplements are produced in a quality manner, do not contain contaminants or impurities,~~ and are accurately labeled. The regulations include requirements for establishing quality control procedures for us and our vendors and suppliers, designing and constructing manufacturing plants, and testing ingredients and finished products. The regulations also include requirements for record keeping and handling consumer product complaints. If dietary supplements contain contaminants or do not contain the type or quantity of dietary ingredient they are represented to contain, the FDA would consider those products to be adulterated or misbranded.Overseas

~~Our~~Although ~~business~~GX-Life is ~~subject~~not required to ~~additional~~obtain governmental ~~FDA regulations~~approval, ~~such~~including asthe ~~those implementing~~U.S. anFood ~~adverse~~and ~~event~~Drug ~~reporting~~Administration’s ~~system~~ (“~~AER’s~~FDA”) approval, ~~which~~prior ~~requires~~to usselling its products to ~~document~~consumers, GX-Life’s products and ~~track~~related ~~adverse~~promotional ~~events~~and marketing activities are subject to extensive governmental regulation by numerous governmental agencies and ~~report~~authorities ~~serious~~in ~~adverse~~the ~~events~~United States, ~~which~~including ~~are~~the ~~events~~FDA, ~~involving~~the ~~hospitalization~~Federal orTrade ~~death~~Commission (the “FTC”), ~~associated~~the ~~with~~Consumer ~~consumers’~~Product ~~use~~Safety Commission, the United States Department of Agriculture, State Attorneys General, ~~our~~and other state regulatory agencies. In GX-Life’s foreign markets, the products are generally regulated by similar government agencies.

~~Most~~GX-Life’s ofpersonal ~~our~~care ~~major~~products ~~markets~~are subject ~~also~~to various laws and regulations that regulate ~~advertising~~cosmetic products and set forth regulations for determining whether a product ~~claims~~can ~~regarding~~be ~~the~~marketed ~~efficacy~~as ofa ~~products~~“cosmetic” or requires further approval as an over-the-counter (“OTC”) drug. ~~This~~In the United States, regulation of cosmetics is ~~particularly~~under ~~true~~the ~~with~~jurisdiction ~~respect~~of tothe ~~our~~FDA. ~~dietary~~The ~~supplements~~Food, ~~because~~Drug weand ~~typically~~Cosmetic Act defines cosmetics ~~market~~by ~~them~~their intended use, as ~~foods~~“articles orintended ~~health~~to ~~foods.~~be ~~For~~rubbed, ~~example~~poured, insprinkled, ~~the~~or ~~United~~sprayed ~~States~~on, weintroduced ~~are~~into, ~~unable~~or otherwise applied to ~~claim~~the ~~that~~human ~~any~~body of. ~~our~~. ~~nutritional~~. ~~supplements will~~for ~~diagnose~~cleansing, ~~cure~~beautifying, ~~mitigate~~promoting attractiveness, ~~treat~~ or ~~prevent~~altering ~~disease~~the appearance.” In Among the ~~United~~products ~~States,~~included ~~the~~in ~~Dietary~~this ~~Supplement~~definition ~~Health~~are skin moisturizers, eye and ~~Education~~facial ~~Act~~makeup preparations, perfumes, lipsticks, fingernail ~~however~~polishes, ~~permits~~shampoos, ~~substantiated~~permanent waves, ~~truthful~~hair ~~and~~colors, ~~non-misleading~~toothpastes ~~statements~~and ofdeodorants, ~~nutritional~~as ~~support~~well toas beany ~~made~~material inintended ~~labeling,~~for ~~such~~use as ~~statements~~a component ~~describing~~of ~~general~~a ~~well-being~~cosmetic ~~resulting~~product. ~~from~~Conversely, ~~consumption~~a ofproduct awill ~~dietary~~not ~~ingredient~~be orconsidered ~~the~~a ~~role~~cosmetic, ofbut may be considered a ~~nutrient~~drug orif ~~dietary~~it ~~ingredient~~is intended for use in ~~affecting~~the diagnosis, cure, mitigation, treatment, or ~~maintaining~~prevention aof ~~structure~~disease, or ais intended to affect the structure or any function of the body. ~~Most~~A ofproduct’s ~~the~~intended use can be inferred from marketing or product claims. The other markets in which GX-Life weoperates ~~operate~~ have ~~not~~similar ~~adopted~~regulations. In China, personal care products are placed into one of two categories, “general” ~~similar~~and ~~legislation~~“drug.” Products in both categories require submission of formulas and other information with the health authorities, and ~~although~~drug weproducts ~~may~~require behuman ~~subject~~clinical studies. The product registration process in China for these products can take from nine to more ~~restrictive~~than ~~limitations~~18 onmonths ~~the~~or ~~claims~~longer. Such weregulations in any given market can ~~make~~limit ~~about~~GX-Life’s ~~our~~ability ~~products~~to inimport products ~~these~~and ~~markets~~can delay product launches as GX-Life goes through the registration and approval process for those products.

UThe markets in which GX-Life operate all have varied regulations that distinguish foods and nutritional health supplements from “drugs” or “pharmaceutical products.S” Because of the varied regulations, some products or ingredients that are recognized as a “food” in certain markets may be treated as a “pharmaceutical” in other markets. ~~Federal~~These ~~Commodities~~regulations ~~Regulation~~may require GX-Life to either modify a product or refrain from selling the product in a given market. As a result, GX-Life must regularly modify the ingredients and/or the levels of ingredients in its products for certain markets. In some circumstances, the regulations in foreign markets may require GX-Life to obtain regulatory approval prior to the introduction of a new product or limit GX-Life’s use of certain ingredients altogether. There has been an increased movement in the United States and other markets to expand the regulation of dietary supplements. This could impose additional restrictions or requirements in the future. Because of this increased regulatory focus, GX-Life’s internal review efforts have been enhanced in order to comply with its understanding of current regulations.

AsFDA aregulations ~~result~~require ofcurrent ~~our~~good ~~business~~manufacturing practices ~~activities~~(“cGMP”) ~~surrounding~~for ~~Great~~dietary ~~Coin~~supplements. ~~and GX~~The ~~Coin,~~regulations itensure ~~is possible~~ that ~~our~~dietary ~~Company~~supplements ~~and/or~~are ~~any~~produced ~~one~~in ora ~~more~~quality manner, ofdo ~~our~~not ~~affiliates~~contain ~~could~~contaminants beor ~~subject~~impurities, toand ~~regulation~~are byaccurately ~~the U~~labeled.S. ~~Commodity Futures~~The ~~Trading~~regulations ~~Commission~~include ~~(the~~requirements ~~“CFTC”),~~for ~~depending~~establishing quality oncontrol ~~the~~procedures ~~CFTC’s~~for ~~views~~GX-Life ofand ~~the~~its ~~regulation~~vendors ofand ~~crypto-currencies. In~~suppliers, ~~such~~designing ~~event~~and ~~the~~constructing ~~trading~~manufacturing ~~platform~~plants, ~~which~~and ~~will~~testing ingredients beand ~~managed~~finished byproducts. ~~Great~~The ~~Coin~~regulations ~~may~~also beinclude ~~required~~requirements tofor berecord ~~registered~~keeping asand ahandling ~~“swap~~consumer ~~execution~~product complaints. ~~facility”,~~If asdietary ~~such~~supplements ~~term~~contain iscontaminants ~~defined~~or bydo not contain the ~~Commodity~~type ~~Exchange~~or ~~Act,~~quantity ~~and~~of wedietary ~~and/or~~ingredient ~~one~~they orare ~~more~~represented ofto contain, ~~our~~the ~~affiliates~~FDA ~~may~~would beconsider ~~required~~ those products to ~~register~~be ~~with~~adulterated ~~the~~or ~~CFTC~~misbranded.

~~Money~~GX-Life’s ~~Transmitter~~business ~~Laws~~and products are subject to additional FDA regulations, such as those implementing an adverse event reporting system (“AER’s”), which requires GX-Life to document and track adverse events and report serious adverse events, which are events involving hospitalization or death, associated with consumers’ use of GX-Life’s products.

AsMost aof ~~result~~GX-Life’s major markets also regulate advertising and product claims regarding the efficacy of ~~our~~products. ~~business~~This ~~activities~~is ~~surrounding~~particularly ~~Great~~true ~~Coin~~with ~~and~~respect to GX-Life’s dietary supplements because GX-Life ~~Coin,~~typically ~~our~~markets ~~Company~~them ~~and/~~as foods or ~~any~~health ~~one~~foods. orFor ~~more~~example, ofin ~~our~~the ~~affiliates~~United ~~may~~States, ~~have~~GX-Life is unable to ~~register~~claim ~~with~~that ~~the~~any ~~U.S.~~of ~~Department~~its ofnutritional supplements will diagnose, cure, mitigate, treat or prevent disease. In the ~~Treasury’s~~United ~~Financial~~States, ~~Crimes~~the ~~Enforcement~~Dietary ~~Network~~Supplement Health and Education Act, orhowever, ~~FinCEN~~permits substantiated, astruthful aand ~~“money~~non-misleading ~~services~~statements of ~~business”~~nutritional support to be made in labeling, such as ~~such~~statements ~~term~~describing isgeneral ~~defined~~well-being ~~under~~resulting ~~applicable~~from consumption of a ~~FinCEN~~dietary ~~regulations,~~ingredient ~~and~~or ~~obtain~~the ~~state~~role ~~money~~of ~~transmitter~~a (nutrient or ~~its~~dietary ~~equivalent)~~ingredient ~~licenses~~in affecting or maintaining a structure or a function of the body. Most of the other markets in which GX-Life operates have not adopted similar legislation, asalthough ~~required~~GX-Life bymay be subject to more restrictive limitations on the ~~relevant~~claims ~~state~~it ~~laws~~can make about its products in these markets.

U.S. Federal Commodities Regulation

As a result of our strategic partnership with Great Coin and GX-Life's use of GX Coin as a component of the GX-Life Global Compensation Plan, it is possible that our Company and/or any one or more of our affiliates could be subject to regulation by the U.S. Commodity Futures Trading Commission (the “CFTC”), depending on the CFTC’s views of the regulation of cryptocurrencies. In such event, the GX Coin Platform, which will be managed by Great Coin, may be required to be registered as a “swap execution facility”, as such term is defined by the Commodity Exchange Act, and we and/or one or more of our affiliates may be required to register with the CFTC.

Moreover, the CFTC retains enforcement authority over any contract or sale of any commodity in interstate commerce. Because the definition of "commodity" under the Commodity Exchange Act includes cryptocurrencies, the CFTC retains broad antifraud and anti-manipulation enforcement authority with respect to GX Coin transactions.

Except with respect to the CFTC's broad antifraud and anti-manipulation enforcement authority (discussed above), "spot" or "cash" contracts for commodities (including cryptocurrencies) are generally beyond the regulatory scope of the CFTC, so long as such contracts result in the immediate sale and delivery of the commodity. How the CFTC views what constitutes "actual delivery" in the context of cryptocurrencies is still a developing area of law and regulation. As a result, the CFTC's regulatory and enforcement authority and scope with respect to cryptocurrencies is still a moving target and subject to change as the market and the regulatory oversight landscape develops.

Money Transmitter Laws

As a result of GX-Life’s use of GX Coin in connection with the GX-Life Global Compensation Plan, our Company and/or any one or more of our affiliates may have to register with FinCEN as a money services business, as such term is defined under applicable FinCEN regulations, and obtain state money transmitter (or its equivalent) licenses, as required by the relevant state laws.

Other Regulatory Issues

As a United States entity selling in foreign jurisdictions, weGX-Life ~~are~~ and/or the Company is subject to foreign exchange control, transfer pricing, and custom laws that regulate the flow of funds between our subsidiaries and use for product purchases, management services and contractual obligations, such as the payment of member commissions. As is the case with most companies that operate in ~~our~~GX-Life’s product categories, we GX-Life might receive inquiries from time to time from government regulatory authorities regarding the nature of ~~our~~its business and other issues, such as compliance with local direct selling, transfer pricing, customs, taxation, foreign exchange control, securities and other laws.

Effect of Governmental Regulations

GX-Life is subject to general business and governmental regulations and laws relating to its business and products. Existing and future laws and regulations may impede the products that GX-Life sells to its consumers. These regulations and laws may cover items such as: e-commerce, product labeling, product ingredients, pricing, distribution, reporting, consumer protections, and other similar regulations. Unfavorable outcomes of these issues may negatively impact the Company’s business and results of operations.

Product Warranties and Returns – Consumer Products

~~Our~~GX-Life's refund policies and procedures closely follow industry and country-specific standards, which vary greatly by country. For example, in the United States, the Direct Selling Association recommends that direct sellers permit returns during the twelve-month period following the sale, while in Hong Kong the standard return policy is 14 days following the sale. ~~Our~~GX-Life's return policies typically conform to local laws or the recommendation of the local direct selling association. In most cases, ~~members~~GX-Life Members who timely return unopened product that is in resalable condition may receive a refund. The amount of the refund may be dependent on the country in which the sale occurred, the timeliness of the return, and any applicable re-stocking fee. However, ~~members~~GX-Life Members must notify usGX-Life about any product returns in writing, and such returns may lead to the ~~member~~GX-Life Member’s termination or a reduction in the ~~member~~GX-Life Member’s ~~status~~commissions ~~points~~ with ~~our Company~~ GX-Life. Furthermore, weGX-Life may alter ~~our~~its return policy in response to special circumstances from time to time.

~~EB-5 INVESTMENTS~~8

Global Future City Regional LLC is an EB-5 Regional Center approved by the USCIS. As an EB-5 Regional Center, we intend to attract and pool investments from qualified foreign investors for the purpose of job creation within a defined geographic region. Each investor is required to demonstrate that at least 10 new jobs are to be created or saved as a result of the EB-5 investment, which must be a minimum $500,000 if the funds are invested and are at “risk” in certain high-unemployment or rural areas.

As of the filing date of this report, we have initiated the review of projects which may meet the EB-5 requirements but have not yet selected an EB-5 investment project that meets our internal criteria.

Our Industry

We are engaged in the network and direct selling industry, selling wellness, herbal, beauty, lifestyle and home products. More specifically, we are engaged in what is called network marketing. This type of organizational structure and approach to marketing and sales include companies selling lifestyle enhancement products, skin-care products, nutrition supplements, energy and tea products, and the intend to increase its healthy life-style consumer products overtime. Generally, direct selling is based upon an organizational structure in which independent members purchasing a company’s products are compensated for sales made directly to consumers.

Our standard members are compensated based on the sale of certain products, while VIP members are compensated based on sales generated by members they have enrolled and all subsequent members enrolled by their “down-line” network of members. The experience of the network and direct selling industry has been that once a sizeable network of members is established, new and alternative products and services can be offered to those members for sale to consumers and additional members.

Competition

~~The~~We ~~direct~~compete with many organizations including companies in the direct-selling and/or network marketing industry. These include very diverse companies, with giant multinational corporations as well as smaller, local operators competing amongst each other. Bigger companies include Nu Skin Enterprises, Inc., USANA Health Sciences, Inc., and Herbalife, Ltd, which have much greater name recognition and financial resources than weGX-Life does do and also have many more members. These companies are publicly traded. ~~and~~GX-Life ~~therefore~~faces ~~serve~~significant ascompetition ~~informational benchmarks,~~from ~~but~~a wewide dovariety of ~~not~~medium ~~overlap~~and ~~with~~small-sized ~~them~~privately inheld ~~terms~~companies, many of ~~marketplace~~whom orcompete ~~product~~directly ~~range~~with GX-Life. ~~While~~With ~~many~~the ~~medium~~exception ~~and~~of ~~small~~GX-~~sized privately~~Life’s ~~held~~tea ~~companies~~products, ~~are~~all ~~closer~~cosmetic, tonutrition, ~~directly~~supplement, ~~competing~~and ~~with~~energy usdrink atproducts ~~this~~are ~~time,~~made wein ~~serve~~the United States. GX-Life believes that the ~~marketplace~~distribution ~~with~~of ~~MADE~~these IN“Made in USA” products ~~which~~gives it a competitive advantage over its peers that do not distribute wesuch ~~believe~~products because GX-Life believes that these products are in great demand in the Chinese, Taiwanese and Hong Kong markets. Furthermore, AsGX-Life webelieves ~~grow,~~that weincorporating ~~believe~~GX weCoins ~~have~~into anthe ~~advantage~~GX-Life ~~of being~~Global Compensation Plan gives GX-Life a ~~wholly~~competitive advantage because it differentiates and distinguishes GX-~~owned~~Life ~~subsidiary~~from ofother acompeting ~~publicly~~businesses ~~traded~~that ~~company~~do innot ~~the~~offer ~~United~~GX ~~States~~Coins or similar types of programs.

~~Our~~GX-Life's ability to compete with other companies depends, in significant part, on ~~our~~GX-Life's success in attracting ~~and~~customers ~~retaining~~to ~~members~~its products. There ~~can~~is be no assurance that ~~our programs for attracting and retaining~~GX-Life ~~members~~ will be ~~successful.~~able ~~The~~to ~~pool~~compete ofeffectively ~~individuals~~against ~~interested~~retail instores, ~~our~~internet-based ~~business model is limited in each market~~retailers, ~~and~~or ~~it is further reduced to the extent that~~ other ~~companies~~direct ~~successfully attract these individuals into their businesses. Although we believe that we offer an attractive opportunity for our members~~sellers, ~~there can be~~ no ~~assurance~~matter ~~that~~which ~~other companies will not be able to recruit~~sales ~~our~~avenue ~~existing~~is ~~members or deplete the pool of potential members in a given market~~used.

Furthermore, the network and direct selling channel tends to sell products at a higher price compared to traditional retailers, which poses a degree of competitive risk. Once again, our competitive advantage lies in our skinEB-~~care,~~5 nutrition, and energy product being manufactured to standards required in the United States which commands a higher price particularly in countries that do not have a system similar to the U.S. to apply and monitor manufacturing standards on these products. However, there is no assurance that we would continue to compete effectively against retail stores, internet-based retailers, or other direct sellers.Operations

~~Moving~~Acquisition ~~Forward~~of Global Future City Regional Center, LLC (f/k/a Powerdyne Regional Center, LLC)

~~Although~~On weMarch ~~plan~~27, to2015, ~~expand~~we closed on our ~~reach~~acquisition of ~~and~~what ~~operations~~became byGlobal ~~using~~Future ~~our internal~~City ~~resources~~Regional Center, weLLC, ~~also~~an ~~intend~~EB-5 toRegional ~~utilize~~Center ~~external~~(USCIS ~~resources~~ID asNumber ~~well.~~1215250671) ~~For~~that ~~instance~~was approved by the USCIS on March 28, we2013. ~~use~~The closing (~~and~~“Closing”) ~~will~~of ~~continue~~the toMembership ~~use)~~PSA ~~iMatrix’s software~~occurred on March 27, a2015. ~~company~~We ~~that~~intended on ~~provides~~generating ~~comprehensive~~revenue ~~software~~in ~~solutions~~this toline ~~manage~~of ~~direct~~business ~~sales~~by ~~marketing~~collecting ~~programs~~management fees for overseeing the development of a qualified investment project. We ~~also~~were ~~intend~~never able to ~~rely~~ onfind ~~Global~~an ~~Access,~~EB-5 ainvestment ~~strategic~~project ~~partner~~ that ~~helps~~met usour ~~with~~internal ~~cross-border~~criteria ~~e-commerce~~and, ~~technology~~given ~~and~~the ~~shipping~~difficulties ~~solutions~~caused by Mr. WeLiu’s ~~believe that~~alleged ~~these~~actions, ~~third~~our ~~party~~investment ~~vendors~~in ~~will~~the ~~help~~Regional ~~expand~~Center ~~our~~became ~~operations~~significantly impaired. Consequently, ~~but~~we ~~also~~have abandoned ~~provide~~this ~~overhead~~line of business and ~~cost~~are ~~flexibility~~pursuing ~~with~~a ~~their~~buyer ~~respective service~~for ~~area~~the ~~expertise~~Regional Center.

Intellectual Property

We currently own the trademarks to: (i) “F.I.T.T. Energy” (U.S. Registration No. 4240806), (ii) “F.I.T.T. Energy” (U.S. Registration No. 4115809), and (iii) “Throw A F.I.T.T” (U.S. Registration No. 4462991).

Employees

As of the date of this Report, we employ 10 persons, all of whom are full-time. We retain independent contractors as needed. Our employees are not represented by a labor union and we believe that our employee relations are satisfactory.

ITEM 1A. RISK FACTORS

AnWe ~~investment~~are ~~in our common stock involves~~ a ~~high~~smaller ~~degree~~reporting ofcompany ~~risk. You~~as ~~should~~defined ~~carefully~~by ~~consider the following risk factors and the other information in this Annual Report on Form 10~~Rule 12b-~~K before investing~~2 ~~in our common stock. Our business and results~~ of ~~operations~~the ~~could~~Securities beExchange ~~seriously~~Act ~~harmed by any~~ of ~~the~~1934 ~~following~~and ~~risks. The risks set out below~~ are not ~~the~~required ~~only risks we face. Additional risks and uncertainties not currently known~~ to usprovide ~~or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. If any of~~ the ~~following~~information ~~events~~under ~~occur,~~this ~~our business, financial condition and results of operations could be materially adversely affected~~item. ~~In such case, the value and trading price of our common stock could decline, and you may lose all or part of your investment.~~

RISKS RELATED TO OUR COMPANY, BUSINESS AND INDUSTRY

Risks Related to GX-Life Global

Government regulation of the Internet and e-commerce is evolving, and unfavorable changes could substantially harm our business and results of operations.

We will be subject to general business regulations and laws as well as Federal and state regulations and laws specifically governing the Internet and e-commerce. Existing and future laws and regulations may impede the growth of the Internet, e-commerce or other online services, and increase the cost of providing online services. These regulations and laws may cover sweepstakes, taxation, tariffs, user privacy, data protection, pricing, content, copyrights, distribution, electronic contracts and other communications, consumer protection, broadband residential Internet access and the characteristics and quality of services. It is not clear how existing laws governing issues such as property ownership, sales, use and other taxes, libel and personal privacy apply to the Internet and e-commerce. Unfavorable resolution of these issues may harm our business and results of operations.

We could be harmed by data loss or other security breaches.

As a result of our services being web-based and the fact that we may process, store and transmit large amounts of data, including personal information, for our customers, failure to prevent or mitigate data loss or other security breaches, including breaches of our vendors’ technology and systems, could expose us or our customers to a risk of loss or misuse of such information, adversely affect our operating results, result in litigation or potential liability for us and otherwise harm our business. We will use third party technology and systems for a variety of reasons, including, without limitation, encryption and authentication technology, employee email, content delivery to customers, back-office support and other functions. Although we have developed systems and processes that are designed to protect customer information and prevent data loss and other security breaches, including systems and processes designed to reduce the impact of a security breach at a third party vendor, such measures cannot provide absolute security.

We face risks related to system interruption and lack of redundancy.

We may experience occasional system interruptions and delays that make our websites and services unavailable or slow to respond and prevent us from efficiently fulfilling orders or providing services to third parties, which may reduce our net sales and the attractiveness of our products and services. If we are unable to continually add software and hardware, effectively upgrade our systems and network infrastructure and take other steps to improve the efficiency of our systems, it could cause system interruptions or delays and adversely affect our operating results.

Our computer and communications systems and operations could be damaged or interrupted by fire, flood, power loss, telecommunications failure, earthquakes, acts of war or terrorism, acts of God, computer viruses, physical or electronic break-ins, and similar events or disruptions. Any of these events could cause system interruption, delays, and loss of critical data, and could prevent us from accepting and fulfilling customer orders and providing services, which could make our product and service offerings less attractive and subject us to liability. Our systems are not fully redundant and our disaster recovery planning may not be sufficient. In addition, we may have inadequate insurance coverage to compensate for any related losses. Any of these events could damage our reputation and be expensive to remedy.

We face inventory risk.

We will be exposed to inventory risks that may adversely affect our operating results as a result of seasonality, limitations on shelf-life, new product launches, rapid changes in product cycles and pricing, defective merchandise, changes in consumer demand and consumer spending patterns, changes in consumer tastes with respect to our products and other factors. We endeavor to accurately predict these trends and avoid overstocking or understocking products we manufacture and/or sell. Demand for products, however, can change significantly between the time inventory or components are ordered and the date of sale. In addition, when we begin selling or manufacturing a new product, it may be difficult to establish vendor relationships, determine appropriate product or component selection, and accurately forecast demand. The acquisition of certain types of inventory or components may require significant lead-time and prepayment and they may not be returnable. We carry a broad selection and sizeable inventory levels of certain products, such as consumer electronics, and we may be unable to sell products in sufficient quantities or during the relevant selling seasons. Any one of the inventory risk factors set forth above may adversely affect our operating results.

Our supplier relationships subject us to a number of risks.

We may have significant suppliers, including licensors, and in some cases, limited or single-sources of supply, that are important to our sourcing, services, manufacturing, and any related ongoing servicing of merchandise and content. We do not have long-term arrangements with most of our suppliers to guarantee availability of merchandise, content, components or services, particular payment terms, or the extension of credit limits. If our current suppliers were to stop selling or licensing merchandise, content, components or services to us on acceptable terms, or delay delivery, including as a result of one or more supplier bankruptcies due to poor economic conditions, as a result of natural disasters or for other reasons, we may be unable to procure alternatives from other suppliers in a timely and efficient manner and on acceptable terms, or at all.

We may be subject to product liability claims if people or properties are harmed by the products we sell.

Some of the products we sell or manufacture may expose us to product liability claims relating to personal injury, death, or environmental or property damage, and may require product recalls or other actions. Certain third parties also sell products using our e-commerce platform that may increase our exposure to product liability claims, such as if these sellers do not have sufficient protection from such claims. Although we maintain liability insurance, we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all. In addition, some of our agreements with our vendors and sellers do not indemnify us from product liability.

We are subject to payments-related risks.

We accept payments using a variety of methods, including credit card, debit card, credit accounts (including promotional financing), gift certificates, direct debit from a customer’s bank account, consumer invoicing, physical bank check and payment upon delivery. As we offer new payment options to our customers, we may be subject to additional regulations, compliance requirements, and fraud. For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over time and raise our operating costs and lower profitability. We rely on third parties to provide payment processing services, including the processing of credit cards, debit cards, electronic checks, and promotional financing, and it could disrupt our business if these companies become unwilling or unable to provide these services to us. We are also subject to payment card association operating rules, including data security rules, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. If we fail to comply with these rules or requirements, or if our data security systems are breached or compromised, we may be liable for card issuing banks’ costs, subject to fines and higher transaction fees and lose our ability to accept credit and debit card payments from our customers, process electronic funds transfers, or facilitate other types of online payments, and our business and operating results could be adversely affected. We also offer co-branded credit card programs that represent a significant component of our services revenue. If one or more of these agreements are terminated and we are unable to replace them on similar terms, or at all, it could adversely affect our operating results.

Risks Related to our EB-5 Program

The failure of the EB-5 investor to obtain a Visa following the Regional Center investment may cause problems to our business and reputation and open our Company up to litigation.

After investing with our Company’s EB-5 Regional Center, there is the risk that a specific project does not qualify an investor for the EB-5 Visa. The I-829 application may be denied. There are several possible reasons for the denial of the application:

· The investor’s capital was not fully invested thereby failing to meet the investor’s minimum capital requirements of the EB-5;

· Material changes were made in the course of the investment which were inconsistent with the job plan submitted with the application;

· Jobs were not created as outlined in the economic impact analysis or within the period of time outlined in the business plan submitted with the application;

· Insufficient job creation;

· Jobs were created outside of a “Targeted Employment Area” as defined in the economic impact analysis; or

· Other factors related to the history, background or personal situation of the specific investor unrelated to the implementation of our EB-5 program.

Each of the above factors, if not carefully monitored by our Company, could result in the denial of an investor’s EB-5 visa application. The denial exposes us to litigation risks and could have a long-term impact on the viability, reputation and ultimate success of our business.

Certain investment projects operated by our Regional Center could be unsuccessful, go into bankruptcy or fail to become fully operational resulting in a loss of the Investor’s principal which may cause problems to our business and reputation and open us up to litigation.

Even if an investor successfully obtains an EB-5 Visa in this process, there is still investment risk associated with the EB-5 Program. Each investor contributes a significant amount of capital that is deployed by our Company into various real estate and business investments. The inherent risk of an investment of this nature may result in investor’s capital not being returned, either in part or in full. There are several possible reasons for a failure to return investor capital:

· The Regional Center project files for bankruptcy;

· The project does not become fully operational thereby failing to generate sufficient return on capital to return principal to investors;

· The project’s ultimate assets has a much lower market value than principal invested;

· Insufficient revenue and inability to refinance may result in low capital reserves necessary to repay investors;

· Competing projects with more experience and capital resources affect the viability of the Regional Center’s project (which is limited to a specific geographic region and thereby unable to relocate away from said competition); or

· Market trends result in lower market demand for project.

Each of the above factors, if not carefully monitored by our Company, could result in the failure of the Regional Center’s projects. The failure of the investment, as with any business enterprise, exposes us to litigation risks and could have a long-term impact on the viability, reputation and ultimate success of our business.

We are exposed to the risks resulting from real estate ownership, which could increase our costs, reduce our profitability and limit our ability to respond to market conditions.

The EB-5 program’s assets will consist of real property and other qualified investment projects. Our real estate ownership subjects us to additional risks not applicable to our GX-Life business, including:

· the illiquid nature of real estate coupled with the need for any real estate investment to qualify for EB-5 treatment, which limits our ability to promptly sell one or more of the real estate properties in our portfolio in response to changing financial conditions;

· adverse changes in economic and market conditions;

· real estate, insurance, zoning, tax, environmental and eminent domain laws, including the condemnation of our properties;

· fluctuations in real estate values or potential impairments in the value of our assets;

· the ongoing need for capital improvements and expenditures to maintain, renovate or upgrade our properties;

· risks associated with mortgage debt, including the possibility of default, fluctuating interest rate levels and the availability of replacement financing;

· risks associated with the possibility that expense increases will outpace revenue increases and that in the event of an economic downturn, the high proportion of fixed expenses among our costs will make it difficult to reduce our expenses to the extent required to offset declining revenues;

· changes in laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance; and

· events beyond our control, such as war, terrorist attacks and force majeure events, including earthquakes, tornados, hurricanes, fires or floods.

Economic and other conditions may materially adversely affect the valuation of our real estate properties resulting in impairment that could have a material adverse effect on our business, results of operations and earnings.

Our EB-5 program will likely hold goodwill, intangible assets and a significant amount of long-lived assets. We evaluate our tangible and intangible assets annually for impairment, or more frequently based on various triggers, including when a property has current or projected operating losses or when other material trends, contingencies or changes in circumstances indicate that a triggering event has occurred, such that an asset’s value may not be recoverable. During times of economic distress, declining demand and declining earnings often result in declining asset values. As a result, we have incurred and we may in the future incur impairment charges, which in the future could be material and adversely affect our results of operations and earnings. The resulting decline in our EB-5 business may then have a substantial negative impact on the operating results of our Company as a whole which would likely result in a decrease of our stock price.

General Risks Related to our Company

Our management and certain of our affiliates may have certain conflicts of interest in connection with the management of our business affairs, including, but not limited to, the following:

· Our management and its affiliates must allocate their time between advising us and managing other investment activities and business activities in which they may be involved.

· The compensation paid to management will be approved by our board of directors (the “Board”) consistent with the exercise of the requisite standard of care applicable to directors under Nevada law. Such compensation is payable, in most cases, whether or not our stockholders receive distributions and may be based in part on the value of assets acquired and sold with leverage.

· Regardless of the quality of the assets acquired, the services provided to our Company, or whether we pay distributions to our stockholders, our managers may receive certain compensation or bonuses based on the management, acquisition and disposition of our portfolio companies.

Unfavorable economic conditions or other factors may affect our ability to raise capital or the performance of our subsidiaries.

Unfavorable economic conditions or other factors could increase our funding costs, limit our access to the capital markets, or result in a decline in the financial performance of our subsidiaries. An inability to successfully access the capital markets could limit our ability to grow our business and fully execute our business strategy and could decrease our earnings, if any.

There is a risk that investors in our common stock may not receive distributions or that our distributions may not grow over time.

We intend to make distributions to our stockholders out of assets legally available for distribution. We cannot assure you that we will achieve investment results that will allow us to make a specified level of cash distributions or year-to-year increases in cash distributions.

We may not be able to compete successfully with other established companies offering the same or similar services and, as a result, we may not achieve our projected revenue and capital appreciation targets.

If we are unable to compete successfully with other businesses in our existing market, we may not achieve our projected revenue and/or user targets. We compete with both start-up and established companies. Compared to our business, some of our competitors may have greater financial and other resources, have been in business longer, have greater name recognition and be better established in the market.

If we have material weaknesses in the financial reporting of our company, it may cause us to restate our financial statements in the event such weaknesses are determined to not be acceptable to financial reporting requirements.

While our review of material weaknesses is ongoing, if we discover any weaknesses that could cause us to have to restate our financial statements, this could cause us to expend additional funds that would have a material impact on our ability to generate profits and on the profits of our business.

The failure to enforce and maintain our intellectual property rights could enable others to use names confusingly similar to our branded products and services and other names and marks used by our business, which could adversely affect the value of the brand.

The success of our business depends on our continued ability to use our existing trade name in order to increase our brand awareness. In that regard, we believe that our trade name is valuable asset that is critical to our success. The unauthorized use or other misappropriation of our trade name could diminish the value of our business concept and may cause a decline in our revenue.

Any new indebtedness may adversely affect our financial condition, results of operations, limit our operational and financing flexibility and negatively impact our business.

Any revolving credit facility, and other debt instruments we may enter into in the future, may have negative consequences to our business, including but not limited to the following:

· Our ability to obtain financing for working capital, capital expenditures, acquisitions or general corporate purposes may be impaired; · We may use a substantial portion of our cash flows from operations to pay interest on any new indebtedness, which will reduce the funds available to us for operations and other purposes; · Our level of indebtedness could place us at a competitive disadvantage compared to our competitors that may have proportionately less debt; · Our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate may be limited; and · Our level of indebtedness may make us more vulnerable to economic downturns and adverse developments in our business.

We expect that we will depend primarily upon invested capital to provide funds to pay our expenses and to pay any amounts that may become due under any new credit facility and any other indebtedness we may incur. Our ability to make these payments depends on our future performance, which will be affected by various financial, business, economic and other factors, many of which we cannot control.

We depend on the services of key executives, the loss of who could materially harm our business and our strategic direction if we were unable to replace them with executives of equal experience and capabilities.

Our senior executives are important to our success because they are instrumental in setting our strategic direction, operating our business, identifying expansion opportunities and arranging any necessary financing. Losing the services of key executives could adversely affect our business until suitable replacements could be found. We do not maintain key person life insurance policies on any of our executives.

We expect to incur substantial expenses to meet our reporting obligations as a public company. In addition, failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting and could harm our ability to manage our expenses.

We estimate that it will cost approximately $60,000 annually to maintain the proper management and financial controls for our filings. In addition, if we do not maintain adequate financial and management personnel, processes and controls, we may not be able to accurately report our financial performance on a timely basis, which could cause a decline in our stock price and adversely affect our ability to raise capital.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

We do not own any real property. Our principal executive offices are located at 2 Park Plaza, Suite 400, Irvine, CA 92614 where we are leasing approximately 5,824 square feet of office space. After completion of tenant improvements in January 2016, the lease commenced with a minimum term of 60 months and requires the following minimum annual payments, excluding property taxes and other common area costs: months 1 through 12 - $176,112; months 13 through 24 - $183,804; months 25 through 36 - $192,192; months 37 through 48 - $200,580; and months 49 through 60 - $209,664. As we have out-sourced manufacturing and product fulfillment, including product storage, we consider our leased office space adequate for the operation of our business.

ITEM 3. LEGAL PROCEEDINGS

WeKevin ~~are currently not a party to, and none of our property is the subject of, any pending legal proceedings. To our knowledge, no governmental authority is contemplating any such proceedings against us.~~McAllister

On June 3, 2016 (the “Filing Date”), Kevin McAllister (“Claimant”) filed a claim against the Company and its CFO and director, Michael Dunn, as an individual (collectively, the “Defendants”), for (i) breach of contract and (ii) fraud with the Superior Court of California, County of Orange, in Santa Ana, California. Claimant alleges that he entered into a written contract, a convertible promissory note (the “McAllister Note”), with the Company on or around December 4, 2014, but that the Company breached the McAllister Note by failing to make certain payments owed to Claimant under the terms of the note. Claimant is also alleging that Defendants agreed to perform its duties under the McAllister Note, but because Defendants have not performed or paid Claimant yet, Claimant alleges that Defendants never intended to pay the amounts owed under the McAllister Note. Furthermore, Claimant alleges that the Company has misrepresented information in its financial statements that the McAllister Note (and other debt), has or will be paid, when the Company allegedly refuses to pay such note (and other debt). Claimant is seeking approximately $182,583 in damages as well as costs of collection, attorney’s fees, punitive damages, and expenses.

On June 30, 2016, the Claimant and Defendants entered into a settlement agreement (the “Settlement Agreement”) whereby the Company agreed to pay Claimant $160,000 (the “Settlement Amount”) in full satisfaction of any and all claims related to the Action. The Settlement Amount was paid to Claimant on July 1, 2016. On July 7, 2016, a Request for Dismissal to dismiss the entire Action against the Defendants from all causes of action was filed with prejudice in the Superior Court of California, County of Orange, in Santa Ana, California. Although the Company settled the Action with Claimant, the Company believes that Claimant’s lawsuit was without merit.

Xinai Zhao re: Ning Liu

On September 29, 2016, Xinai Zhao (“Plaintiff”) filed a complaint (the “Complaint”) against Mr. Ning Liu, the Company’s former Chief Executive Officer, President, and Chairman of the Board, Grand Opus Co., Ltd., a California corporation, Goldenrise Development, Inc., a California corporation, and the Company (collectively, the “Defendants”) in the Superior Court of the State of California, County of Los Angeles (Central District) and is seeking to recover no less than $212,993 in damages.

The Complaint alleges, among other things, that in 2009 Mr. Liu sold a total of 150,000 shares in three separate Chinese companies, and 200,000 shares in China Yongxin Pharmaceuticals Inc. (“CYXN”), a Delaware corporation, to the Plaintiff under false and misleading information. The Complaint also alleges that after CYXN’s stock was suspended and delisted on the Nasdaq Smallcap Market, Mr. Liu provided Plaintiff with 100,000 shares of the Company’s common stock (the “Shares”) around June 2016 to help recoup her losses in these investments.

The Company believes that the Complaint has no merit as it pertains to the Company because (i) the Company never sold the Shares to the Plaintiff, (ii) the Shares were gifted to the Plaintiff by Mr. Liu to help recoup her losses, (iii) the Company is not Mr. Liu’s alter ego, and (iv) the Plaintiff’s claims stem from the sole actions of Mr. Liu prior to serving as a director and officer of the Company. As previously discussed, Mr. Liu has resigned as the Company’s Chief Executive Officer, President, and Chairman of the Board on October 21, 2016.

PRC vs. Ning Liu

On August 30, 2016, we reported on Form 8-K that our former Chief Executive Officer (“CEO”), President, and Chairman of the Board of Directors, Ning Liu, was detained in the People’s Republic of China (“PRC”). On October 21, 2016, because of his ongoing legal challenges in the PRC, Mr. Liu resigned from all his positions in our Company. Mr. Liu continues to be detained in the PRC. The charges against Mr. Liu are personal to him and our Company is in no way named as a defendant or subject to the charges. We have been informed by Mr. Liu’s attorney in the PRC that, on March 2, 2017, he was convicted in Hunan province for violations of the PRC’s multi-level marketing regulations and sentenced to 10 years in prison. We have likewise been informed by Mr. Liu’s attorney that he has an appeal hearing scheduled in Hunan Province in the near future and, if he is unsuccessful in that hearing, he can appeal to a national court in Beijing, China.

From time to time, our Company may become subject to various legal proceedings that are incidental to the ordinary conduct of our business. Although we cannot accurately predict the amount of any liability that may ultimately arise with respect to any of these matters, we make provisions for potential liabilities when we deem them probable and reasonably estimable.

Other than as disclosed herein, we know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation and there are no proceedings in which our directors, officers or any affiliates, or any registered or beneficial shareholder is an adverse party or has a material interest adverse to our interest.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

1310

PART II

Market Information

Our common stock is currently quoted under the symbol “FTCY” on the OTCQB marketplace. The following table reflects on a per share basis the reported high and low bid prices of our Common Stock for each quarter for the period indicated as reported by the OTCQB. Such prices are inter-dealer prices without retail mark-up, mark-down, or commission and may not represent actual transactions.

YEAR ENDED DECEMBER 31, 2016

QUARTER ENDED	HIGH		LOW
March 31, 2016	$	3.64	$	2.20
June 30, 2016	$	3.15	$	2.50
September 30, 2016	$	2.59	$	1.02
December 31, 2016	$	1.35	$	0.51

YEAR ENDED DECEMBER 31, 2015

QUARTER ENDED	HIGH		LOW
March 31, 2015	$	0.99	$	0.20
June 30, 2015	$	2.62	$	0.69
September 30, 2015	$	3.45	$	2.48
December 31, 2015	$	3.00	$	0.90

YEAR ENDED DECEMBER 31, 2014

QUARTER ENDED		HIGH		LOW
	March 31, 2014	$	1.20	$	0.15
	June 30, 2014	$	0.25	$	0.06
	September 30, 2014	$	1.10	$	0.15
	December 31, 2014	$	1.10	$	0.20

The OTCQB is generally considered to be a less active and efficient market than the NASDAQ Global Market, the NASDAQ Capital Market, or any national exchange and does not provide investors with the liquidity that the NASDAQ Global Market, the NASDAQ Capital Market, or a national exchange would offer.

Holders of Common Stock

As of December 31, ~~2015~~2016, the approximate number of registered holders of our common stock was ~~538~~540 (although we believe that the number of beneficial owners of our common stock is substantially greater since a significant number of shares are held in street name). As of December 31, ~~2015~~2016, the number of outstanding shares of our common stock was 4748,~~533~~781,~~029~~586, and there were no shares of common stock subject to outstanding stock options.

Dividends

No dividends were declared on our common stock in the years ended December 31, ~~2015~~2016, and ~~2014~~2015, and we have no plans to pay dividends in the near future. Our dividend policy is subject to the discretion of our Board and depends upon a number of factors, including operating results, financial condition, and general business conditions. Holders of our common stock are entitled to receive dividends if and when declared by our Board out of funds legally available therefor. We may pay cash dividends if net income available to stockholders fully funds the proposed dividends, and the expected rate of earnings retention is consistent with capital needs, asset quality, and overall financial condition. However, at this time, we intend to reinvest earnings, when and if generated, in the continued development and operation of our business.

Equity Compensation Plan Information

On December 30, 2015, we elected to withdraw and terminate our Option Plan for employees, officers, and consultants of our Company. At the time of cancellation, there were no options outstanding, and 13,889 shares were remaining for future issuance. We will re-evaluate the implementation of an option plan in the future in our Board’s discretion.

Sales of Unregistered Securities

On ~~January~~February 2026, ~~2015~~2016, we entered into a consulting ~~agreements~~agreement with ~~four~~a ~~(4) consultants~~consultant, whereby we issued ~~each~~the consultant 50,000 shares of our common stock, for aservices ~~total~~rendered. ~~of 200~~25,000 ~~shares,~~of ~~for~~these ~~services~~shares ~~rendered~~were later returned to our Company under a separate agreement.

~~On January 28, 2015, we entered into consulting agreements with a consultant, whereby we issued the consultant 100,000 shares of our common stock for services rendered.~~11

14On September 30, 2016, we entered into a consulting agreement with a consultant, whereby we issued the consultant 25,000 shares of our common stock for services rendered.

On ~~March~~October 303, ~~2015~~2016, we ~~entered~~sold ~~into a subscription agreement with an accredited investor pursuant to which the investor purchased 6~~25,000~~,000~~ ~~shares~~ of our common stock to an accredited investor for a total ~~purchase~~ of $325,000~~,000~~ ($01.5000 per share).

OnIn ~~April~~December 172016, ~~2015,~~we ~~the~~issued ~~Board~~Promissory Notes ~~approved~~with ~~the~~total ~~issuance~~face value of 3$350,~~371,351 shares~~000 ofto ~~our~~three ~~common~~(3) ~~stock~~debt inholders ~~connection~~along with ~~the~~150,000 ~~closing~~shares of ~~the~~our ~~Sky~~common ~~Rover SPA, for which we received proceeds of $400,000~~stock.

On ~~April~~December 178, ~~2015~~2016, ~~the~~we ~~Board~~entered ~~approved~~into ~~the~~a ~~issuance~~consulting ofagreement ~~10,000 shares~~with ~~of our common stock to~~ a ~~service~~consultant, ~~provider~~whereby inwe ~~exchange~~issued ~~for~~the ~~$18~~consultant 150,~~470,~~000 ~~representing~~shares ~~the~~of ~~debt~~our ~~owed~~common tostock ~~the~~for ~~service~~services ~~provider~~rendered.

On April 17, 2015, the Board approved the issuance of 123,268 shares of our common stock to a note holder that elected to convert a $55,000 convertible promissory note held in the note holder’s name.

On August 24, 2015, the Board approved the issuance of 15,000 shares of our common stock to a service provider in exchange for $29,995, representing the debt owed to the service provider.

In connection with the above stock issuances, we did not pay any underwriting discounts or commissions. None of the sales or issuances of securities described or referred to above was registered under the Securities Act. We had or one of our affiliates had a prior business relationship with each person or entity above, and no general solicitation or advertising was used in connection with the sales or issuances. In making the sales or issuances without registration under the Securities Act, we relied upon the exemption from registration contained in Section 4(a)(2) of the Securities Act.

ITEM 6. SELECTED FINANCIAL DATA

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The purpose of this section is to discuss and analyze our consolidated financial condition, liquidity and capital resources and results of operations. This analysis should be read in conjunction with the consolidated financial statements and related footnote disclosures contained in this report and the following “Cautionary Statement for Forward-Looking Information.”

Cautionary Statement for Forward-Looking Information

Statements included in this report may contain forward-looking statements. Such statements may relate, but are not limited, to projections of revenues, income or loss, development expenditures, plans for growth and future operations, competition and regulation, as well as assumptions relating to the foregoing. Such forward-looking statements are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted or quantified. When used in this report, the words “will,” “could,” “estimates,” “expects,” “anticipates,” “believes,” “plans,” “intends” and variations of such words and similar expressions are intended to identify forward-looking statements that involve risks and uncertainties. Future events and actual results could differ materially from those set forth in, contemplated by or underlying the forward-looking statements.

Factors that could cause actual results to differ materially from any results projected, forecasted, estimated or budgeted or may materially and adversely affect our actual results include, but are not limited to, those set forth in Item 1A. Risk Factors, and elsewhere in this report and in our other public filings with the SEC.

Undue reliance should not be placed on these forward-looking statements, which are applicable only as of the date hereof. Except as may be required by law, we undertake no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this report or to reflect the occurrence of unanticipated events.

Summary of Business

We are a holding company focused in the ~~areas~~area of ~~(i)~~ consumer product sales ~~(through a membership program) and (ii) EB-5 investments~~.

Critical Accounting Policies

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States, which requires us to make estimates and assumptions in certain circumstances that affect amounts reported. In preparing these financial statements, management has made its best estimates and judgments of certain amounts, giving due consideration to materiality. We believe that of our significant accounting policies (more fully described in notes to the consolidated financial statements), the following are particularly important to the portrayal of our results of operations and financial position and may require the application of a higher level of judgment by our management, and as a result are subject to an inherent degree of uncertainty.

Estimates

Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. By their nature, these estimates and judgments are subject to an inherent degree of uncertainty. We review our estimates on an on-going basis, including those related to long-lived assets, contingencies related to pending or threatened litigation, and the valuation of stock grants, options and warrants to purchase common stock. We base our estimates on our historical experience, knowledge of current conditions and our beliefs of what could occur in the future considering available information. Actual results may differ from these estimates, and ~~material~~ material effects on our operating results and financial position may result. We believe the following critical accounting policies involve our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition

Revenue from product sales are recorded when the products are shipped and title passes to independent members. Net revenues are determined after deducting promotional and other allowances in accordance with ASC 605-50. Product sales to members are made pursuant to a member agreement that provides for transfer of both title and risk of loss upon our delivery to the carrier that completes delivery to the members. This is commonly referred to as “F.O.B. Shipping Point.” Amounts received for unshipped product are recorded as deferred revenue. Our sales arrangements do not contain right of inspection or customer acceptance provisions other than general rights of return. ~~Actual product returns are recorded as a reduction to revenue.~~ We estimate and accrue a reserve for product returns based on our return policies and historical experience, with the expense recorded as a reduction to revenue.

15Cash receipts for enrollment packages include nonrefundable enrollment fees for all new members and an additional deposit for upgrading to a VIP status if a member so chooses under the terms of the compensation plan that was in effect during the second quarter of 2016 (the “Q2 Plan”). The nonrefundable enrollment fee is deferred and recognized over the term of the arrangement, generally twelve months.

~~Cash~~For ~~receipts~~members ~~for~~under ~~enrollment~~the ~~packages~~Q2 ~~include~~Plan, ~~nonrefundable~~a ~~enrollment~~VIP status ~~fees~~upgrade ~~for~~is ~~all~~a ~~new~~deposit ~~members~~which ~~and~~is anrepayable ~~additional~~to ~~deposit~~a ~~for~~member ~~upgrading~~either toin ~~VIP~~cash, ~~status~~product, ifor aconvertible ~~member~~into soGX ~~chooses~~Coin. ~~The~~There ~~nonrefundable~~is ~~enrollment~~no revenue associated ~~fee~~with a VIP status upgrade deposit initially; however, isrelated ~~deferred~~party ~~and~~revenue is recognized ~~over~~on the ~~term~~commission ofearned when VIP members under the ~~arrangement,~~Q2 ~~generally~~Plan ~~twelve~~convert ~~months~~their membership or rewards points into GX-Coin. ~~The~~A VIP status upgrade isearns areward ~~deposit~~status points that ~~which~~are isalso ~~repayable~~subject to arepayment ~~member either~~ in cash, ~~product~~ or convertible into GX ~~Coins~~Coin. ~~There~~Pursuant isto noASC ~~revenue~~605-50, ~~associated~~a cost and liability for amounts owed in cash or cash equivalents benefits under nondiscretionary loyalty programs should be accrued with a related contra-revenue, as by transferring the right to cash or cash equivalent benefits, the entity effectively reduces the revenue from conversions of VIP status ~~upgrade~~and ~~deposit~~related accrued benefits to GX Coin. ~~Enrollment~~Each ~~packages~~VIP ~~provide~~member ~~members~~entering ~~access~~the toQ2 ~~both~~Plan athrough ~~personalized~~the ~~marketing~~second ~~website~~quarter ~~and~~of a2016 ~~business~~have ~~management~~elected ~~system~~to convert their respective deposit to GX-Coin by such time or during the third quarter of 2016. NoThe ~~upfront~~Company ~~costs~~recognizes ~~are~~revenue on ~~deferred~~the conversion upon the completion of our performance obligation as part of the ~~amount~~conversion isprocess, ~~nominal~~at which point all necessary revenue recognition criteria have been met.

~~Commissions~~Based on industry developments and best practices of direct selling programs, GX-Life implemented a revised compensation plan on July 15, 2016, and finalized and released such plan on August 1, 2016 (the “GX-Life Global Compensation Plan”). The GX-Life Global Compensation Plan removed the VIP status upgrade deposits and accordingly, the revenues from the conversion of VIP status upgrade deposits is expected to cease during the 2016 year after all deferrals are recognized. GX-Life will continue to generate revenue from the conversion of certain membership transactions to GX Coin where GX-Life is able to make a margin on the conversion.

~~Members~~From oftime ~~our~~to ~~direct~~time, GX-~~selling~~Life ~~program~~may ~~primarily~~make ~~earn commissions~~modifications ~~based~~and onenhancements ~~total~~to ~~personal~~the ~~and~~GX-Life ~~group~~Global ~~sales~~Compensation ~~volume~~Plan ~~and~~to ~~also~~help ~~based~~motivate onGX-Life ~~their VIP status~~Members. ~~Members~~GX-Life may also ~~earn~~enter ~~incentives,~~into ~~which may~~agreements befor ~~both~~business ~~monetary~~or ~~and~~market ~~non-monetary in nature~~development, ~~based~~which onmay ~~meeting~~result ~~certain~~in ~~qualifications~~additional ~~during~~compensation ato ~~designated~~specific ~~incentive~~GX-Life ~~period~~Members. WeGX-Life ~~accrue~~intends to ~~commissions,~~continue ~~including~~to ~~our~~examine ~~estimate~~and ofadjust ~~costs~~the ~~associated~~GX-Life ~~with~~Global ~~the~~Compensation ~~incentives~~Plan to reflect marketplace competition, ~~when~~demand, ~~earned~~and U.S. regulations and ~~pay~~foreign ~~commissions~~jurisdictions. ~~generally~~Because ~~within~~of ~~the agree~~this, GX-toLife ~~timeframe~~recognizes ~~following~~that the ~~end~~compensation ofand rewards available under the ~~applicable~~GX-Life ~~sales~~Global Compensation orPlan ~~incentive~~may ~~period~~be different across different jurisdictions.

In some markets, we pay certain bonuses on purchases by up to three generations of personally enrolled members, as well as bonuses on commissions earned by up to three generations of personally enrolled members.13

From time to time, we make modifications and enhancements to our compensation plan to help motivate members, which can have an impact on member commissions. From time to time, we may also enter into agreements for business or market development, which may result in additional compensation to specific members.

Stock-Based Compensation

We account for stock-based compensation in accordance with ASC 718 – Compensation (“ASC 718”). ASC 718 requires that we account for all stock-based compensation transactions using a fair-value method and recognize the fair value of each award as an expense, generally over the service period. The fair value of stock grants is based upon the market price of our common stock at the grant date. We estimate the fair value of stock option awards, as of the grant date, using the Black-Scholes option-pricing model. The use of the Black-Scholes model requires that we make a number of estimates, including the expected option term, the expected volatility in the price of our common stock, the risk-free rate of interest and the dividend yield on our common stock. If our variable volatility assumptions were different, the resulting determination of the fair value of stock option awards could be materially different and our results of operations could be materially impacted.

Accounting for Equity Instruments Issued to Non-Employees

We account for any equity-based payments to non-employees under ASC 505 – Equity. The fair value of the equity instrument issued or committed to be issued is used to measure the transaction, as this is more reliable than the fair value of the services received. The fair value is measured at the value of our common stock on the date the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. The fair value of the equity instrument is charged directly to the statement of operations and credited to common stock and/or additional paid-in capital as appropriate.

Debt Issued with Common Stock

Debt issued with common stock is accounted for under the guidelines established by ASC 470-20 – Accounting for Debt with Conversion or Other Options. We record the relative fair value of common stock related to the issuance of convertible debt as a debt discount or premium. The discount or premium is subsequently amortized over the expected term of the convertible debt to interest expense.

Impairment of Long-Lived Assets

We review our long-lived assets in accordance with ASC 360-10-35, Impairment or Disposal of Long-Lived Assets. Under that directive, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Such group is tested for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. When such factors and circumstances exist, we compare the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made.

Recent Accounting Pronouncements

InFrom ~~May~~time ~~2014~~to time, the ~~Financial Accounting Standards Board (“~~FASB~~”) issued~~ ~~Accounting~~issues ~~Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers”. Under~~ASUs ~~this~~to ~~guidance,~~amend ~~revenue~~the isauthoritative ~~recognized~~literature ~~when promised goods or services are transferred to customers~~ in anASC. ~~amount~~Management ~~that~~believes ~~reflects the consideration~~ that isthose ~~expected~~issued to bedate ~~received~~that ~~for~~are ~~those~~not ~~goods~~described orbelow ~~services.~~either (i) ~~The~~provide ~~updated~~supplemental ~~standard will replace most existing revenue recognition~~ guidance, ~~under~~(ii) ~~U.S.~~are ~~GAAP~~technical ~~when~~corrections, it(iii) ~~becomes~~are ~~effective~~not ~~and~~applicable ~~permits~~to ~~the~~us ~~use of either the retrospective~~ or ~~cumulative~~(iv) ~~effect transition~~are ~~method. Early adoption is~~ not ~~permitted.~~expected ~~The updated standard will be effective for us beginning January 1, 2018. We~~to ~~are~~have ~~currently~~a ~~evaluating~~significant ~~the~~impact ~~effect that the updated standard will have~~ on ~~its~~our consolidated financial statements ~~and related disclosures~~.

Revenue Recognition. In ~~August~~May 2014, the FASB issued Accounting Standards Update (“ASU” ~~No.~~ ) 2014-1509, “Revenue from ~~"Presentation~~Contracts ofwith ~~Financial~~Customers”. Under ~~Statements—Going~~this ~~Concern"~~guidance, ~~which~~revenue ~~requires~~is ~~management~~recognized towhen ~~evaluate, at~~promised ~~each~~goods ~~annual~~or ~~and~~services ~~interim~~are transferred ~~reporting~~to ~~period,~~customers ~~whether~~in ~~there~~an ~~are~~amount ~~conditions or events~~ that ~~raise~~reflects ~~substantial~~the ~~doubt~~consideration ~~about~~that ~~the~~is ~~entity's ability~~expected to ~~continue~~be asreceived afor ~~going~~those ~~concern~~goods ~~within~~or ~~one~~services. The ~~year~~updated ~~after~~standard ~~the~~will ~~date~~replace ~~the~~most ~~financial~~existing ~~statements~~revenue ~~are~~recognition ~~issued~~guidance ~~and~~under ~~provide~~U.S. ~~related~~GAAP ~~disclosures. ASU~~when ~~2014-15~~it isbecomes effective ~~for~~and ~~annual~~permits the ~~periods~~use ~~ending~~of ~~after~~either ~~December 15,~~the ~~2016~~retrospective ~~and~~or ~~interim~~cumulative ~~periods~~effect ~~thereafter~~transition method. Early ~~application~~ adoption is not permitted. ~~Management~~The isupdated ~~still~~standard will inbe ~~the~~effective ~~process~~for ofus ~~assessing~~beginning January 1, 2018. We are currently evaluating the ~~impact~~effect ofthat ~~ASU~~the ~~2014-15~~updated standard will have on ~~our~~its consolidated financial statements and related disclosures.

16Financial Instruments. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall”. The new guidance affects the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. The guidance is effective for annual and interim periods beginning after December 15, 2017. The guidance on financial liabilities under the fair value option did not have a significant impact on our consolidated financial statements.

Leases. In ~~April~~February ~~2015~~2016, the FASB issued ASU No. ~~2015-05 “Intangibles-Goodwill and~~ ~~Other~~2016-~~Internal-Use~~02, ~~Software.”~~Leases, ~~The~~that ~~standard~~requires ~~amended~~organizations ~~the~~that ~~existing~~lease ~~accounting~~assets, ~~standards~~referred ~~for~~to ~~intangible assets~~as ~~and~~“lessees”, ~~provides~~to ~~explicit~~recognize ~~guidance~~on tothe ~~customers~~balance insheet ~~determining~~ the ~~accounting~~assets and liabilities for ~~fees~~the ~~paid~~rights inand aobligations ~~cloud~~created ~~computing~~by ~~arrangement,~~those ~~wherein~~leases ~~the~~with ~~arrangements~~lease ~~that~~terms doof ~~not~~more ~~convey~~than a12 ~~software~~months. ~~license~~ASU to2016-02 ~~the~~will ~~customer~~also ~~are~~require ~~accounted~~disclosures ~~for~~to ashelp ~~service~~investors ~~contracts.~~and other financial ~~The~~statement ~~pronouncement~~users isbetter ~~effective~~understand ~~for~~the ~~reporting~~amount, ~~periods~~timing, ~~beginning~~and ~~after~~uncertainty ~~December~~of ~~15,~~cash ~~2015.~~flows Wearising ~~early~~from ~~adopted~~leases ~~ASU~~and ~~2015-05~~will include qualitative and ~~applied~~quantitative ~~service~~requirements. ~~contract~~The ~~treatment~~new tostandard ~~the~~will ~~Software~~be ~~License~~effective ~~and~~for ~~Service~~fiscal ~~Agreement~~years ~~described~~beginning inafter ~~Note~~December 615, to2018, ~~the~~including ~~accompanying~~interim ~~consolidated~~periods ~~financial~~within ~~statements~~those asannual weyears, doand ~~not~~early ~~have~~application ~~the~~is ~~right~~permitted. toWe ~~take~~are ~~possession~~currently ofassessing the ~~software,~~impact ~~and~~that ~~thus the~~this ~~contract~~standard iswill ~~deemed~~have aon ~~service~~our ~~contract~~consolidated financial statements.

In November 2015, the FASB issued ASU No. 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes, which requires deferred tax liabilities and assets to be classified as noncurrent in a classified statement of financial position. ASU 2015-17 will align the presentation of deferred income tax assets and liabilities with International Financial Reporting Standards. The new standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those annual years, and early application is permitted. The adoption of this standard is not expected to have a material impact on our consolidated financial statements.14

InShare-Based ~~February~~Payments to Employees. In March 2016, the FASB ~~issued~~ ASU ~~No.~~ 2016-0209, ~~Leases,~~“Improvements ~~that~~to ~~requires~~Employee ~~organizations~~Share-based ~~that lease assets~~Accounting”, ~~referred~~new toguidance ~~as “lessees”,~~ to ~~recognize~~simplify ~~on the balance~~and ~~sheet~~improve ~~the~~accounting ~~assets and liabilities~~ for ~~the~~share-based ~~rights~~payments. ~~and~~The ~~obligations~~amendments ~~created~~include byincome ~~those~~tax ~~leases~~consequences, ~~with~~the ~~lease~~accounting ~~terms~~for ~~of more than 12 months.~~forfeitures, ~~ASU~~classification ~~2016-02~~of ~~will~~awards ~~also~~as ~~require~~either ~~disclosures~~equity toor ~~help~~liabilities ~~investors~~ and ~~other~~classification ~~financial~~on ~~statement users better understand~~ the ~~amount,~~statement ~~timing, and uncertainty~~ of cash flows ~~arising from leases and will include qualitative and quantitative requirements~~. The ~~new~~guidance ~~standard~~is ~~will be~~ effective for ~~fiscal~~annual ~~years~~and interim periods beginning after December 15, ~~2018, including interim periods within those annual years, and early application is permitted~~2016. We ~~are~~do ~~currently~~not ~~assessing~~believe the ~~impact~~adoption ~~that~~of this ~~standard~~accounting guidance will have a material effect on our consolidated financial statements.

~~The~~Cash Flow Classifications. In August 2016, the FASB ~~issues~~issued ~~Accounting~~ASU ~~Standards~~2016-15 ~~Updates~~providing ~~(“ASUs”)~~ new guidance to ~~amend~~reduce the ~~authoritative~~diversity ~~literature~~in practice in ~~ASC.~~how ~~There~~certain ~~have~~transactions ~~been~~are aclassified in ~~number~~the statement of ~~ASUs~~cash toflows. ~~date,~~The ~~including~~guidance ~~those~~adds ~~above,~~or ~~that~~clarifies ~~amend~~guidance on the ~~original~~classification of certain cash receipts and payments ~~text~~in the statement of ~~ASC~~cash flows. ~~Management~~The ~~believes~~guidance ~~that~~is ~~those~~effective for annual and interim periods beginning after December 15, 2017. In November 2016, the FASB issued tonew ~~date~~guidance ~~either~~on ~~(i)~~restricted ~~provide~~cash. ~~supplemental~~The guidance, ~~(ii)~~requires ~~are~~that ~~technical~~a ~~corrections,~~statement of cash flows explain the ~~(iii)~~change ~~are~~during ~~not~~the ~~applicable~~period toin usthe total of cash, cash equivalents and amounts generally described as restricted cash or ~~(iv)~~restricted cash ~~are~~equivalents. ~~not~~The ~~expected~~guidance tois ~~have~~effective afor ~~significant~~annual and interim periods beginning after December 15, 2017. We are currently evaluating the impact this new guidance will have on our consolidated financial statements.

Results of Operations for the Years Ended December 31, ~~2015~~2016 and ~~2014~~2015

Net Revenues

Net sales were ~~zero~~$3,507,513 for ~~2015~~2016 versus ~~$51,255~~zero for ~~2014~~2015. InThe ~~2015,~~increase weis ~~created~~directly related to the ~~framework~~new ~~for~~member’s ~~several~~in ~~new~~our ~~lines~~direct ofselling ~~business~~program ~~for~~and ~~which~~related wedeposits, ~~began~~membership toand ~~see~~starter ~~revenues~~kit infees under ~~2016~~the Q2 plan. ~~Our~~The ~~2014~~primary ~~revenue~~increase ~~represented~~relates to $3,468,582 of related party commissions earned through the members’ conversion of deposits (including accrued rewards points) to GX-Coin during the ~~clearance~~period. ~~sale~~We ofalso arecorded ~~significant~~$20,206 ~~part~~in starter kit revenue and $18,725 of ~~our~~membership ~~remaining~~fees ~~inventory~~which atwe ~~reduced~~amortize ~~pricing~~over ~~since~~the itrequisite ~~was~~membership ~~nearing~~period ~~expiration~~of twelve months.

Cost of Net Revenues

Cost of net revenues for ~~2015~~2016 was $1,128,504 versus zero ~~while~~for ~~cost~~2015. ofThe ~~net~~2016 ~~revenues~~ amount includes charges for ~~2014~~inventory ~~was~~impairment totaling $451,~~924~~122,520. ~~resulting~~Because of the legal challenges faced by Ning Liu in athe ~~gross~~PRC, ~~profit~~as ofdescribed $5above,~~331~~ we were forced to suspend our direct selling program in the fourth quarter of 2016 and revalue our inventory to its net realizable value. ~~Because~~We currently are pursuing relationships with a number of sales organizations who can purchase our existing inventory for resale purposes in an attempt to establish a wholesale relationship with these organizations as well as liquidate large quantities of inventory to extract value prior the ~~limited~~expiration ~~amount~~date of certain products. This would allow us to take advantage of established sales ~~during~~networks ~~2014~~and, ~~margins~~if ~~were~~successful, ~~adversely impacted~~create a sustainable stream of revenue.

Selling and Marketing Expenses

Selling and marketing expenses were $~~102~~1,~~915~~ 402,964 and $31102,~~620~~915 in ~~2015~~ 2016 and ~~2014~~2015, respectively. The increase in these expenses was primarily attributable to the ramping up of our direct selling program including the travel costs and promotion required to attract new members. The main categories of cost in 2016 are consulting - $65374,~~000~~503; oftravel ~~stock~~-~~based~~ ~~expenses~~$615,173; ~~(250~~advertising and promotion - $239,~~000~~023; ~~common~~fulfillment - $99,860; and product design ~~shares)~~and ~~for~~development ~~marketing~~- $53,727. 2016 consulting ~~concerning~~fees ~~loyalty~~include ~~points~~$179,750 in ~~China~~expenses which ~~represented~~are ~~the~~stock-based ~~fair~~for ~~value~~shares ofissued ~~the~~to ~~services rendered.~~consultants ~~These~~for ~~shares~~product ~~were~~and ~~issued~~market indevelopment. ~~anticipation~~2015 includes $65,000 of ~~the~~stock-based ~~Sky~~expenses ~~Rover~~(250,000 ~~SPA~~common shares) for marketing consulting concerning loyalty points in China.

General and Administrative Expenses

General and administrative expenses for ~~2015~~ 2016 were $14,~~036~~363,~~108~~683 compared to $~~674~~1,~~157~~036,108 for the comparable period in ~~2014~~2015. The ~~2014~~increase in these expenses was primarily attributable to beginning the implementation of our business plan including hiring personnel, expanding office space and increasing the use of outside professionals. The 2016 period includes $~~335~~1,~~000~~516,584 in employee compensation and benefits versus approximately $65335,000 in 2015. During 2015, our Company’s management was transitioning and no formal employment agreements had been put in place. Therefore minimal compensation and benefits were accrued in connection with services. Our former CEO agreed to forgo any compensation prior to the SPA closing as any salary would be forgiven as part of his separation agreement. Our former controller was paid as a consultant for services rendered at a fraction of a cost compared to his previous full-time salary. ~~Our~~In ~~professional~~addition ~~fees~~to ~~(mainly~~employee ~~legal)~~compensation and ~~filing~~benefits, ~~fees~~other ~~were~~main ~~higher~~categories of expense in ~~2015~~2016 ~~than~~are ~~2014~~consulting by- a$1,110,085; ~~total~~legal of& ~~about~~accounting - $~~623~~773,~~000~~047; bad debts - $275,967; and rent - $154,694. The bad debts in 2016 primarily asresulted afrom ~~result~~deposits with vendors that went out of business ~~costs~~before ~~related~~delivering products to ~~the Sky~~us. ~~Rover~~All ~~SPA,~~of ~~our~~these ~~change~~major inexpense ~~management~~categories ~~and~~were ~~the~~considerably ~~redirecting~~higher ofin ~~our~~2016 ~~business~~that ~~plan~~2015. ~~away~~The 2016 ~~from~~employee ~~EGD~~compensation ~~and~~costs ~~toward~~include GX$237,078 in stock-~~Life~~based compensation expense for shares issued to our employees.

Impairments

Our former CEO, Ning Liu, is currently detained in the PRC. In addition, we have been informed by Mr. Liu’s attorney in the PRC that, on March 2, 2017, he was convicted in Hunan Province for violations of the PRC’s multi-level marketing regulations and sentenced to 10 years in prison. Mr. Liu’s legal difficulties have had a severe adverse impact on our Company causing potential investors to look elsewhere for opportunities and existing stakeholders to distrust our brand. As a result, in the fourth quarter of 2016, we suspended our direct selling program which had been the main focus of our business plan and we abandoned our EB-5 program for lack of interest.

During 2016, we made significant advances to Great Coin to assist them in their development of a trading platform for the GX Coin, a digital currency we wished to use in a rewards program for our direct selling program which we have suspended. Our impairment of amounts due from related parties of $1,518,300 consists mainly of our advances to Great Coin. In addition, we impaired the remaining unamortized Service Contract with Great Coin of $280,000. Finally, we impaired our $250,000 investment in Powerdyne, our EB-5 investment.

Interest Expense

Interest expense in ~~2015~~2016 was $~~104~~163,~~799~~751 compared to $~~159~~104,~~868~~799 for the same period in ~~2014~~2015. The ~~decrease~~increase in interest expense during the ~~2015~~2016 period ~~resulted~~is ~~from~~primarily ~~lower~~the ~~amortization~~result ~~expense~~of ~~for debt~~the ~~discounts~~high ~~compared~~cost toof ~~the~~borrowing ~~2014~~related ~~period~~to ~~and~~the a$300,000 ~~reduction~~ in ~~total~~promissory ~~debt~~notes ~~due~~issued toduring ~~various~~the ~~settlement~~fourth ~~agreements~~quarter ~~entered~~of ~~into~~the ~~with noteholders~~year.

Gain or Loss on Extinguishment of Debt

~~See~~During ~~Note~~2016, 15we recorded a loss on extinguishment of debt of $9,627 related to the ~~accompanying~~repayment ~~consolidated~~of ~~financial~~a ~~statements~~note payable. The 2015 gain on extinguishment of debt totaling $333,823 consisted mainly ~~for~~of asettlements ~~detail~~and write-offs of ~~the~~notes ~~components~~payable, ~~for~~accounts ~~this~~payable ~~category~~and accrued expenses.

Liquidity and Capital Resources

As ofa ~~December~~result ~~31,~~of ~~2015,~~recurring ~~our~~losses ~~principal~~and ~~source~~negative cash offlows ~~liquidity~~there is ~~from~~ a substantial doubt about the ~~receipt~~Company’s ofability ~~$3,000,000~~to ~~from~~continue Mras a going concern. ~~Lei~~The ~~Pei~~company ~~for~~intends ~~the~~to fund ~~sale~~its ofoperations ~~6,000,000~~with ~~shares~~additional ofequity ~~newly~~and/or ~~issued~~debt ~~common~~financing, ~~stock~~but Mr. ~~The~~Liu’s ~~receipt~~legal ofchallenges in the ~~$3,000,000 was~~PRC ~~received~~have onmade ~~March~~this extremely ~~30,~~difficult. ~~2015~~Management tois ~~fund~~also ~~our~~making ~~operating~~efforts ~~costs,~~to ~~operating~~sell ~~and~~our ~~marketing~~remaining ofinventory. ~~our~~If ~~newly~~we ~~acquired~~cannot ~~businesses,~~raise ~~general~~additional ~~corporate~~short term ~~purposes~~capital, ~~working~~we ~~capital~~may ~~requirements,~~consume ~~and~~all ~~expansion~~of ~~plans~~our ~~through~~cash ~~the~~reserved ~~end~~for ~~of 2015~~operations. ~~Prior~~There toare ~~this~~no ~~stock~~assurances ~~sale,~~that wemanagement ~~funded~~will ~~our~~be ~~operations with~~able ~~proceeds~~to ~~from~~raise capital ~~(i)~~on ~~the~~terms ~~Sky~~acceptable ~~Rover~~to ~~SPA,~~our ~~(ii)~~Company ~~the~~or ~~issuance~~at ofall. ~~debt~~The ~~instruments~~consolidated ~~and~~financial ~~(iii)~~statements ~~sales~~do ofnot ~~our~~include ~~common~~any ~~stock.~~adjustments ~~Our principal~~relating ~~short-term~~to the recoverability and ~~long-term~~classification ~~liquidity~~of ~~needs~~recorded ~~have~~asset ~~been,~~amounts ~~and~~or ~~are~~the ~~expected~~amounts toand ~~be,~~classification ~~funding~~of ~~operating~~liabilities ~~losses~~that ~~until~~would be ~~profitability~~necessary isif ~~achieved and~~we ~~making~~are ~~expenditures~~unable ~~for~~to ~~general~~continue ~~corporate~~as ~~purposes~~a going concern.

17As of December 31, 2016, our principal source of liquidity is from cash proceeds from the issuance of notes payable. Previous sources of liquidity were proceeds received from our direct selling program activities, but that program has been suspended and may not be reactivated in the future. During the year ended December 31, 2016, we raised $2,658,086 in capital under our Form S-1 Registration Statement on file with the Securities and Exchange Commission. The S-1 is currently under review and we will not sell any shares under the S-1 until it is deemed effective by the SEC. Reference to the S-1 is not an offer to sell the securities described therein, and we are not soliciting an offer to buy the securities in any state where the offer or sale is not permitted.

~~Management~~At ~~continues~~December ~~to seek capital through various sources. On May 8~~31, ~~2015~~2016, ~~we filed a Form S-1 Registration Statement under the Securities Act of 1933 (“S-1”) with the SEC for the initial registration of 10 million shares of~~ our ~~common~~cash ~~stock,~~ and oncash ~~July~~equivalents 6,were ~~2015~~$85, ~~the S-1 was declared effective by~~650 ~~the SEC. On October 8, 2015, we submitted a Post-Effective Amendment to our S-1 incorporating the new information resulting from the GX-Life Transactions~~ and resignation of our former CEO, Lei Pei. The Post-Effective Amendment was declared effective by the SEC on October 19, 2015. The offering is priced at $3.50 per share. The S-1 has been qualified for sale in California and New York and we ~~are~~had ~~free~~negative toworking ~~sell~~capital ~~under the S-1~~ in ~~those~~excess ~~jurisdictions within the United States. Subsequent to December 31, 2015, we arranged for the sale~~ of ~~1,000,000 shares under the S-1 for a total of~~ $~~3,500,000~~2.0 ~~In that regard, we have received $999,975 to date and we are in the process of finalizing the remaining paperwork and funding with respect to the sale~~million.

AtIn ~~December 31~~2016, ~~2015,~~we ~~our~~issued ~~cash~~$300,000 ~~and~~in ~~cash~~notes ~~equivalents~~payable ~~were~~while also repaying $~~655~~312,~~405 and~~434 weof ~~had~~notes ~~negative~~payable ~~working~~and ~~capital~~accrued ~~of approximately $256,000~~interest.

InWe ~~prior~~also ~~years,~~received ~~we issued~~ a ~~number~~$250,000 ofcapital ~~notes payable and used the~~contribution ~~proceeds~~from toour ~~fund~~former ~~operations.~~CEO ~~These notes payable were,~~ in ~~most~~the ~~cases,~~form ~~issued~~of ~~along~~a ~~with~~repayment ~~our common shares or common shares~~ of ~~FITT~~member deposits.

During 2015, we reduced our notes payable by a total of $100,000. $45,000 of the reduction was through a debt write-off and note settlement and the other $55,000 was through the conversion of a convertible note.16

We also received $539,885 in connection with the Sky Rover SPA and $150,000 from our former Chief Executive Officer for the acquisition of Powerdyne.

Cash Flows

The following table sets forth our cash flows for the year ended December 31:

		2015				2014
	2016				2015
Operating activities
Net income (loss)	$	$(5,609,937	~~(910,786~~)	)	$	$(910,786	~~190,620~~)
Change in non-cash items		3,776,341	~~(262,456~~	)		(262,456	~~(1,030,624~~)	)
Change in working capital		206,693	~~(1,147,835~~	)		(1,147,835	~~481,561~~)
Total		(1,626,903	~~(2,321,077~~)	)		(2,321,077	~~(358,443~~)	)
Investing activities		(416,420	~~(449,634~~)	)		(449,634	–)
Financing activities		1,473,568	~~3,270,845~~			3,270,845	~~513,129~~
Total	$	$569,755	~~500,134~~		$	$500,134	~~154,686~~

Operating Activities

During the ~~2015~~2016 period, non-cash items include ~~gain~~write-offs totaling $2,048,300 of our investment in Powerdyne, our Service contract with Great Coin, and amounts due from related parties, principally Great Coin. Also included is an inventory impairment charge of $1,122,520 related to our suspended direct selling program. Finally, this category also includes a loss on extinguishment of debt, ~~shares~~and ~~issued~~expenses ~~for~~related to stock-based compensation and ~~services~~depreciation and ~~depreciation~~amortization. The change in working capital is primarily ~~related~~results tofrom ~~deposits made~~payments for inventory ~~and~~offset by ~~the~~increases ~~upfront~~in ~~cost~~accounts ofpayable, ~~our~~accrued ~~service~~expenses ~~contract~~and ~~with~~membership ~~Great Coin~~deposits.

During the ~~2014~~2015 period, non-cash items include ~~loss~~gain on extinguishment of debt, shares issued for compensation and services, ~~depreciation,~~ and ~~amortization of debt discount and beneficial conversion feature~~depreciation. The change in working capital is primarily related to ~~increases~~deposits inmade ~~accounts~~for ~~payable, accrued expenses and accrued compensation~~inventory.

Investing Activities

During the 2016 period, we made capital expenditures of $416,420. During the 2015 period, we paid $200,000 toward our acquisition of Powerdyne. We also made capital expenditures of $249,634. ~~There~~and ~~was no~~paid ~~cash~~$350,000 ~~expended~~in ~~for~~connection ~~investing~~with ~~purposes~~a inSoftware ~~the~~License ~~2014~~and ~~period~~Services Agreement with Great Coin.

Financing Activities

During the 2016 period, we received $2,683,086 in proceeds from the sale of common stock, primarily under our S-1 offering. We also received $300,000 in proceeds from the issuance of notes payable and $250,000 in a capital contribution from our former CEO. Offsetting this were repayments of notes receivable and accrued interest of $312,434 and advances to related parties, mainly Great Coin, of $1,497,055.

During the 2015 period, we received $3,000,000 from the sale of 6,000,000 shares of common stock, $150,000 from our former CEO for the acquisition of Powerdyne, $139,885 in connection with the Sky Rover SPA, and $48,293 in finalizing all issues with Lei Pei. We repaid $52,844 to a related party and a shareholder and paid $14,489 in deferred financing costs relating to our S-1 offering.

During the 2014 period, we received $40,000 from the issuance of a note payable, $525,000 in connection with the then proposed business combination with Greenome and paid $50,000 to a shareholder to facilitate the Greenome transaction. In addition, we repaid $1,871 to a related party and shareholder.

Off Balance Sheet Arrangements

We have no off balance sheet arrangements.

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

1817

ITEM 8. FINANCIAL STATEMENTS

		Page No.
Audited Consolidated Financial Statements for Global Future City Holding Inc.
Report of Independent Registered Public Accounting Firm		2019
Consolidated Balance Sheets as of December 31, 2015 and 2014		21
Consolidated Balance Sheets as of December 31, 2016 and 2015		20
Consolidated Statements of Operations for the Years Ended December 31, 2015 and 2014		22
Consolidated Statements of Operations for the Years Ended December 31, 2016 and 2015		21
Consolidated Statements of Shareholders’ Deficit for the Years Ended December 31, 2015 and 2014		23
Consolidated Statements of Shareholders’ Deficit for the Years Ended December 31, 2016 and 2015		22
Consolidated Statements of Cash Flows for the Years Ended December 31, 2015 and 2014		24
Consolidated Statements of Cash Flows for the Years Ended December 31, 2016 and 2015		23
Notes to Consolidated Financial Statements		2524

1918

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Global Future City Holding Inc.

We have audited the accompanying consolidated balance sheets of Global Future City Holding Inc. and subsidiaries (collectively the “Company”) as of December 31, ~~2015~~2016 and ~~2014~~2015, and the related consolidated statements of operations, shareholders’ equity (deficit), and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company was not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Global Future City Holding Inc. as of December 31, ~~2015~~2016 and ~~2014~~2015, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

~~/s/~~The ~~dbbmckennon~~accompanying ~~Newport~~consolidated ~~Beach~~financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, ~~California~~the ~~April~~Company 13has suffered losses from operations and has a significant working capital deficit, ~~2016~~which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters also are described in Note 1. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

20/s/ dbbmckennon Newport Beach, California April 17, 2017

GLOBAL FUTURE CITY HOLDING INC.

CONSOLIDATED BALANCE SHEETS

	December 31,
Assets:	2015			2014
	2016			2015
Assets:
Current assets:
Cash and cash equivalents	$	~~655~~85,~~405~~650		$	~~155~~655,~~271~~405
Accounts receivable, net of allowance		–4,355			~~51,256~~–
Inventories on hand		–572,310			~~3,426~~–
Inventory deposits		~~879,504~~–			–879,504
Deferred financing costs		~~14,489~~–			–14,489
Prepaid expenses		2118,~~411~~427			1021,~~277~~411
Total current assets		1680,~~570,809~~742			~~220~~1,~~230~~570,809
Property and equipment, net		~~249~~549,~~325~~019			6249,~~059~~325
Investment in Powerdyne at cost		250,000			–
Investment in Powerdyne		–			250,000
Service contract- related party		350,000			–
Service Contract – related party, net		–			350,000
Other assets		19,~~359~~954			–19,359
Total assets	$	21,~~439~~249,~~493~~715		$	~~226~~2,~~289~~439,493
Liabilities and Shareholders’ Equity (Deficit):
Current liabilities:
Accounts payable	$	~~326~~526,~~700~~417		$	~~505~~326,~~602~~700
Accrued expenses and deposits		138,677			526,238
Accrued expenses		270,714			138,677
Accrued compensation		~~211~~315,~~905~~277			1211,~~996,559~~905
Membership deposits and accrued benefits		10550,~~020~~808			–10,020
Deferred revenue		~~600~~1,375			–600
Notes payable		1,~~050~~006,~~000~~453			1,~~100~~050,000
Advances from related parties		89,~~359~~966			~~157~~89,~~203~~359
Total current liabilities		12,~~827~~761,~~261~~010			41,~~285~~827,~~602~~261
Total liabilities		12,~~827~~761,~~261~~010			41,~~285~~827,~~602~~261
Commitments and contingent liabilities
Commitments and contingent liabilities (Note 12)
Shareholders’ equity (deficit):
Preferred stock, $0.001 par value: 20,000,000 shares authorized, no shares issued and outstanding		–			–
Common stock, $0.001 par value: 150,000,000 shares authorized, 47,533,029 and 37,763,410 shares issued and outstanding at December 31, 2015 and 2014, respectively.		47,533			37,763
Common stock, $0.001 par value: 150,000,000 shares authorized, 48,781,586 and 47,533,029 shares issued and outstanding at December 31, 2016 and 2015, respectively.		48,782			47,533
Additional paid-in capital		69,~~007~~492,~~601~~762			~~435~~6,~~040~~007,601
Accumulated deficit		(511,~~442~~052,~~902~~839	)		(45,~~532~~442,~~116~~902	)
Total shareholders’ equity (deficit)		~~612~~(1,~~232~~511,295	)		(4612,~~059,313~~232	)
Total liabilities and shareholders’ equity (deficit)	$	21,~~439~~249,~~493~~715		$	~~226~~2,~~289~~439,493

See accompanying Notes to Consolidated Financial Statements.

2120

GLOBAL FUTURE CITY HOLDING INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31,
	2015			2014
	2016			2015
Net revenues	$	–		$	51,255
Revenue – related party commissions	$	3,468,582		$	–
Cost of net revenues		–			45,924
Revenue – direct selling		38,931			–
Gross profit		–			5,331
Total revenue, net		3,507,513			–
Cost of net revenues (includes inventory impairment charge of $1,122,520 and $0 in 2016 and 2015, respectively)		1,128,504			–
Gross profit		2,379,009			–
Operating expenses:
Selling and marketing (includes stock-based expense of $65,000 and $0 in 2015 and 2014, respectively)		102,915			31,620
Selling and marketing (includes stock-based expense of $179,570 and $65,000 in 2016 and 2015, respectively)		1,402,964			102,915
General and administrative (includes stock-based expense of $0 and $12,500 in 2015 and 2014, respectively)		1,036,108			674,157
General and administrative (includes stock-based expense of $237,078 and $0 in 2016 and 2015, respectively)		4,363,683			1,036,108
Total operating expenses		1,139,023			705,777
Impairment of investment in Powerdyne		250,000			–
Operating loss		(1,139,023	)		(700,446	)
Impairment of service contract – related party		280,000			–
Reserve on due from related parties		1,518,300			–
Total operating expenses		7,814,947			1,139,023
Operating loss		(5,435,938	)		(1,139,023	)
Other income (expense):
Interest expense		(~~104~~163,~~799~~751	)		(~~159~~104,~~868~~799	)
Interest income		13179			–13
Gain on extinguishment of debt		~~333~~(9,~~823~~627	)		1333,~~051,734~~823
Total other income (expense)		~~229~~(173,~~037~~199	)		~~891~~229,~~866~~037
Income (loss) before income taxes		(909,986	)		191,420
Loss before income taxes		(5,609,137	)		(909,986	)
Provision for income taxes		800			800
Net income (loss)	$	(910,786	)	$	190,620
Net loss	$	(5,609,937	)	$	(910,786	)
Basic net income (loss) per common share	$	(0.02	)	$	0.01
Basic net loss per common share	$	(0.12	)	$	(0.02	)
Diluted net income (loss) per common share	$	(0.02	)	$	0.01
Diluted net loss per common share	$	(0.12	)	$	(0.02	)
Weighted average number of common shares used in basic per share calculations		4548,~~004~~194,~~313~~399			3745,~~609~~004,~~063~~313
Weighted average number of common shares used in diluted per share calculations		4548,~~004~~194,~~313~~399			3845,~~955~~004,~~254~~313

See accompanying Notes to Consolidated Financial Statements.

2221

GLOBAL FUTURE CITY HOLDING INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

	Preferred Stock	~~Preferred Stock~~					Common Stock		~~Common Stock~~			Additional Paid-in			Accumulated		~~Additional Paid-in~~				~~Accumulated~~
	Shares	~~Shares~~		Amount		~~Amount~~	Shares		~~Shares~~Amount			Capital	~~Amount~~		Deficit		~~Capital~~	Total			~~Deficit~~			~~Total~~
Balance at December 31, 2013			–			$	–			38,018,748			$	38,019			$	213,876			$	(4,722,736	)	$(4,470,841	)
Balance at December 31, 2014		–		$	–			37,763,410	$	37,763		$	435,040		$	(4,532,116	)	$	(4,059,313	)
Stock issued to non-employees for services			–				–			50,000				50				12,450				–		12,500
Sale of common stock		–			–			6,000,000		6,000			2,994,000			–			3,000,000
Stock returned for repayment of advances			–				–			(695,736	)			(696	)			(26,855	)			–		(27,551	)
Stock issued to non-employees for services		–			–			250,000		250			64,750			–			65,000
Stock issued for extinguishment of debt		–	–		–		–	25,000		~~390,398~~25			47,075	~~390~~		–		~~235,569~~	47,100			–		~~235,959~~
Net income			–				–			–				–				–				190,620		190,620
Stock issued for conversion of debt		–			–			123,268		123			58,156			–			58,279
Balance at December 31, 2014			–				–			37,763,410				37,763				435,040				(4,532,116	)	(4,059,313	)
Stock issued in connection with Stock Purchase Agreement		–			–			3,371,351		3,372			396,628			–			400,000
Sale of common stock			–				–			6,000,000				6,000				2,994,000				–		3,000,000
Forgiveness of debt by officer and employee		–			–			–		–			1,673,774			–			1,673,774
Stock issued to non-employees for services			–				–			250,000				250				64,750				–		65,000
Other capital contributions		–			–			–		–			355,425			–			355,425
Stock issued for extinguishment of debt			–				–			25,000				25				47,075				–		47,100
Net liabilities assumed in acquisition		–			–			–		–			(17,247	)		–			(17,247	)
Stock issued for conversion of debt			–				–			123,268				123				58,156				–		58,279
Net loss		–			–			–		–			–			(910,786	)		(910,786	)
Stock issued in connection with Stock Purchase Agreement			–				–			3,371,351				3,372				396,628				–		400,000
Balance at December 31, 2015		–			–			47,533,029		47,533			6,007,601			(5,442,902	)		612,232
Forgiven accrued compensation by officer and employee			–				–			–				–				1,673,774				–		1,673,774
Sale of common stock		–			–			784,453		785			2,682,301			–			2,683,086
Other capital contributions			–				–			–				–				355,425				–		355,425
Stock issued to non-employees for services		–			–			203,000		203			179,367			–			179,570
Net liabilities assumed in acquisition			–				–			–				–				(17,247	)			–		(17,247	)
Stock issued to employees for services		–			–			97,000		97			236,981			–			237,078
Net loss			–				–			–				–				–				(910,786	)	(910,786	)
Stock issued in settlement of debt		–			–			14,104		14			49,350			–			49,364
Balance at December 31, 2015			–			$	–			47,533,029			$	47,533			$	6,007,601			$	(5,442,902	)	$612,232
Stock issued with debt		–			–			150,000		150			87,162			–			87,312
Other capital contributions		–			–			–		–			250,000			–			250,000
Net loss		–			–			–		–			–			(5,609,937	)		(5,609,937	)
Balance at December 31, 2016		–		$	–			48,781,586	$	48,782		$	9,492,762		$	(11,052,839	)	$	(1,511,295	)

See accompanying Notes to Consolidated Financial Statements.

2322

GLOBAL FUTURE CITY HOLDING INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2015			2014
	2016			2015
Cash flows from operating activities:
Net income (loss)	$	(910,786	)	$	190,620
Net loss	$	(5,609,937	)	$	(910,786	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
(Gain) on extinguishment of debt		(333,823	)		(1,051,734	)
Loss on extinguishment of debt		9,627			(333,823	)
Common stock issued for services and compensation		65,000			12,500
Inventory impairment		1,122,520
Depreciation		6,367			6,110
Impairment of investment in Powerdyne		250,000			–
Amortization of debt discount/debt accretion		–			2,500
Impairment of service contract – related party		280,000			–
Reserve on due from related parties		1,518,300			–
Common stock issued for services and compensation		416,647			65,000
Depreciation and amortization		179,247			6,367
Changes in operating assets and liabilities:
Accounts receivable		51(4,~~256~~355	)		(51,256	)
Inventory and inventory deposits		(876,078	)		49,070
Inventories and inventory deposits		(815,326	)		(876,078	)
Prepaid expenses		(11,133	)		(6,045	)
Deferred financing costs		14,489			–
Service contract - related party		(350,000	)		–
Prepaid expenses		2,984			(11,133	)
Other assets		(19,359	)		–
Service contract - related party		–			(350,000	)
Accounts payable		77,298			86,360
Other assets		(595	)		(19,359	)
Accrued expenses		26,441			147,148
Accounts payable		199,717			77,298
Accrued compensation		(56,880	)		256,284
Accrued expenses		164,844			26,441
Membership deposits and accrued benefits		10,020			–
Accrued compensation		103,372			(56,880	)
Deferred income		600			–
Membership deposits and accrued benefits		540,788			10,020
Net cash used in operating activities		(2,321,077	)		(358,443	)
Deferred revenue		775			600
Net cash used in operating activities		(1,626,903	)		(2,321,077	)
Cash flows from investing activities:
Capital expenditures		(~~249~~416,~~634~~420	)		–(249,634	)
Acquisition of Powerdyne EB-5 license		~~(200,000~~–	)		–(200,000	)
Net cash used in investing activities		(~~449~~416,~~634~~420	)		–(449,634	)
Cash flows from financing activities:
Sale of common stock		32,~~000~~683,~~000~~086			–3,000,000
Proceeds from capital contribution for acquisition of Powerdyne		~~150,000~~–			–150,000
Proceeds from capital contributions		~~188~~250,~~178~~000			–188,178
Cash paid for deferred financing costs		~~(14,489~~–	)		–(14,489	)
Repayments to a related party		(52,844	)		(1,871	)
Borrowings from (repayments to) a related party		49,971			(52,844	)
Proceeds from issuance of notes payable		–			40,000
Advances to related parties		(1,497,055	)		–
Proceeds from deposit on proposed business combination		–			525,000
Proceeds from issuance of notes payable		300,000			–
Payment to shareholder to facilitate proposed business combination		–			(50,000	)
Repayment of notes payable and accrued interest		(312,434	)		–
Net cash provided by financing activities		31,~~270~~473,~~845~~568			~~513~~3,~~129~~270,845
Net increase (decrease) in cash and cash equivalents		~~500~~(569,~~134~~755	)		~~154~~500,~~686~~134
Cash and cash equivalents at beginning of year		~~155~~655,~~271~~405			~~585~~155,271
Cash and cash equivalents at end of year	$	~~655~~85,~~405~~650		$	~~155~~655,~~271~~405
Supplemental disclosure of cash flow information:
Cash paid for interest	$	437		$	~~562~~437
Cash paid for income taxes	$	–		$	–
Supplemental disclosure of non-cash investing and financing activities:
Repayment of accounts payable and advances with common stock	$	~~47,075~~–		$	2747,~~551~~075
Conversion of notes payable and accrued interest	$	~~58,279~~–		$	7058,~~479~~279
Discount on convertible notes payable	$	–		$	2,500
Forgiven accrued compensation	$	–		$	1,673,774
Forgiven accrued compensation	$	1,673,774		$	–
Assets acquired from Powerdyne for note payable	$	–		$	250,000
Investment in Powerdyne with note payable	$	250,000		$	–
Net liabilities assumed in GX-Life acquisition	$	–		$	17,247
Net liabilities assumed in GX-Life acquisition	$	17,247		$	–

See accompanying Notes to Consolidated Financial Statements.

2423

GLOBAL FUTURE CITY HOLDING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Business and Nature of Operations

Corporate History

Our Company was incorporated in the State of Nevada on October 12, 2000 under the name Cogen Systems, Inc. We changed our name to Snocone Systems, Inc. on December 6, 2001. On April 1, 2005, Snocone Systems, Inc. and its wholly-owned subsidiary, WYD Acquisition Corp., a California corporation (the “Merger Sub”), merged with Who’s Your Daddy, Inc. (“WYD”), an unrelated, privately held California corporation, whereby the Merger Sub merged with and into WYD. After the merger, WYD continued its corporate existence as a direct, wholly-owned ~~subsidiary~~ subsidiary of Snocone Systems, Inc. under the laws of the State of California. On April 13, 2005, we changed our name to Who’s ~~Your~~ Your Daddy, Inc. and, effective June 1, 2010, we changed our name to FITT Highway Products, Inc. Effective October 29, 2013, we ~~merged~~ merged with F.I.T.T. Energy Products, Inc. (“FITT”) whereby FITT merged into our Company, with our Company being the ~~surviving~~ surviving entity. Effective October 29, 2014 the name of our Company was changed to Global Future City Holding Inc. (the “Company” or “we”) and our trading symbol changed from “FHWY” to “FTCY.”

~~Description~~Detention of ~~Business~~our ~~and~~Former ~~Nature~~Chief ofExecutive ~~Operations~~Officer

WeOn ~~are~~August a30, ~~holding~~2016, ~~company~~we ~~focused~~reported inon Form 8-K that our former Chief Executive Officer, President, and Chairman of the ~~areas~~Board of ~~consumer~~Directors, ~~product~~Ning Liu, was detained in the People’s ~~sales~~Republic of China (~~through~~“PRC”) and we had begun investigating the facts and circumstances surrounding his detainment. On September 9, 2016, we filed Form 8-K reporting that Mr. Liu was taking a ~~membership~~30 ~~program~~day leave of absence from all positions he held with our Company. Finally, on October 21, 2016, because of his ongoing legal challenges in the PRC, Mr. Liu resigned from all his positions in our Company. Also on October 21, 2016, our Board of Directors appointed Michael R. Dunn to the positions of Chief Executive Officer (“CEO”), President and ~~EB-5~~Chairman ~~investments~~of the Board.

~~With~~Mr. ~~respect~~Liu continues to ~~consumer~~be ~~product~~detained ~~sales~~in the PRC. We have been informed by Mr. Liu’s attorney in the PRC that, weon ~~entered~~March ~~this~~2, ~~market space~~2017, ~~through~~he ~~our~~was ~~October~~convicted ~~2015~~in ~~acquisition~~Hunan province for violations of GXthe PRC’s multi-~~Life~~level ~~Global~~marketing regulations and sentenced to 10 years in prison. We have likewise been informed by Mr. Liu’s attorney that he has an appeal hearing scheduled in Hunan Province in the near future and, ~~Inc~~if he is unsuccessful in that hearing, he can appeal to a national court in Beijing China. ~~(“GX-Life”)~~This process could take months and it is very difficult to get reliable information on the particulars of Mr. ~~See~~Liu’s ~~Note~~case 3to make any intelligent assessment as to the final outcome. While ~~Through~~many ~~GX-Life~~of the facts of his detention and conviction are unclear, we ~~sell high~~have ~~quality~~been ~~consumer~~informed ~~products~~that ~~such~~Mr. asLiu ~~personal~~allegedly ~~care~~raised capital through the sale of a digital coin, ~~wellness~~named Wan Fu Bi, ~~and~~all ~~quality-of-life~~while ~~products~~representing ~~under~~himself as the ~~brand~~CEO of our Company and an unaffiliated private company, Great Coin Inc. (“~~GX-Life~~Great Coin”~~, via~~). ~~direct~~As ~~sales~~further todescribed ~~consumers~~below, ~~and~~Great eCoin, which was co-~~commerce~~owned ~~channels~~by Mr. Liu ~~GX-Life~~and Michael Dunn, is a ~~business~~technology ~~which~~company ~~has~~that developed the GX Coin, a ~~robust~~digital currency, ~~scalable~~and ~~network~~a ~~marketing~~ trading platform ~~that~~for ~~utilizes~~the ~~iMatrix~~GX Coin. Through a February 2016 agreement with Great Coin, our Company’s ~~software~~direct-selling program members were able to ~~support~~convert a ~~direct~~portion ~~selling~~of ~~opportunities~~their ~~throughout~~membership ~~the~~accounts ~~world~~into GX Coins. ~~During~~It is unclear whether investors in Wan Fu Bi believed it was the ~~three~~same as ~~months~~the ~~ended~~GX ~~March~~Coin. 31Even though Mr. Liu was allegedly representing himself as the CEO of our Company and also of Great Coin, ~~2016~~his activities were never authorized by either company, weWan ~~have~~Fu ~~received~~Bi ~~approximately~~has $1no affiliation with either company or Michael Dunn,~~770,000~~ and no funds resulting from ~~new~~the ~~members~~alleged ~~enrolled~~activities inwere ever received by our ~~GX-Life~~Company, ~~direct-selling membership~~Great ~~program~~Coin or Michael Dunn.

~~Our~~While ~~direct-selling~~no ~~program~~actions ~~includes~~have been filed against our Company as a ~~reward~~result ~~program~~of ~~featuring~~Mr. Liu’s actions, his detention and legal challenges have had, and continue to have, a material adverse ~~digital~~impact ~~currency~~on ~~(the~~us. ~~“GX~~We ~~Coin”)~~believe wethat ~~access~~potential ~~through~~investors anin ~~agreement~~our Company and potential business partners have refused and or avoided doing business with ~~Great~~us ~~Coin,~~due ~~Inc~~to Mr. ~~(“Great~~Liu’s ~~Coin”)~~actions. ~~See~~Our efforts to implement our direct selling program became significantly more ~~Note~~difficult 6due to questions surrounding Mr. Liu’s detention. In addition, our investment in Global Future City Regional LLC, an EB-5 Regional Center, was significantly impaired due to Mr. Liu’s actions, and potential project partners decided to investigate their opportunities elsewhere.

~~GX-Life,~~While ~~prior~~Mr. toLiu is no longer involved with our Company, ~~acquisition~~many potential investors and strategic partners, ~~was~~particularly ~~primarily~~those ~~owned~~in bythe ~~our~~PRC, ~~CEO~~became distrustful of us, resulting in ~~Ning~~significant ~~Liu~~harm to our credibility, our brand and our ~~COO/CFO~~ability to raise capital. As a result of Mr. Liu’s alleged actions, we ~~Michael~~were ~~Dunn~~forced to suspend our direct selling program (the “GX-Life Direct Selling Program”) in the fourth quarter of 2016 and to abandon and write-off our investment in our EB-5 Regional Center line of business. ~~Great~~We ~~Coin~~believe isMr. ~~currently~~Liu’s ~~owned~~alleged actions bywere the ~~same~~primary ~~two~~factor ~~individuals~~in our stock price falling from a high of $3.64 per share in the first quarter of 2016 to a low of $0.51 per share in the fourth quarter of 2016, causing us to experience significant lost opportunities to raise capital. In addition, after focusing a significant portion of our resources for several months attempting to redirect our marketing strategy to an online sales program with little success, we were forced to lay off a majority of our employees in January 2017 to reduce costs to a minimal level.

In 2015, we purchased 100% of the membership interests in Powerdyne, an EB-5 Regional Center approved by the USCIS. See Note 3. As an EB-5 Regional Center, we intend to attract and pool investments from qualified foreign investors for the purpose of job creation within a defined geographic region. To date, we have not yet been involved with any EB-5 investment projects, but we are actively pursuing several opportunities. Due to the size, scope and complexity of these projects, we expect that it will take significant time for their vetting, funding and completion.24

WeIn ~~will~~response ~~continue~~ to ~~market~~Mr. Liu’s alleged actions and ~~sell~~their significant harm to our ~~previous~~Company, on March 20, 2017 we entered into a Stock Issuance Cancellation Agreement with Mr. Liu ~~product~~and ~~line~~certain of his affiliates (the “Stockholders”) under which the Stockholders agreed to return 8,349,906 common shares owned by them to our Company for cancellation. We retain the Fright in the future to bring actions against Mr.I Liu for any and all further damages his alleged actions may have caused.T In a separate agreement, Mr.T Liu also relinquished his 50% ownership in Great Coin to Mr. ~~brand~~Dunn ofand ~~energy~~Mr. ~~drinks,~~Dunn asretains ~~part~~the ofright ~~our~~to ~~direct-selling~~bring ~~business~~future actions against Mr. Liu for any damages his alleged actions may have caused.

~~Changes~~Description inof ~~Ownership~~Business

~~Sky~~We ~~Rover~~are ~~Stock~~a ~~Purchase~~holding ~~Agreement~~company focused in the area of consumer product sales. We entered this market space through our October 2015 acquisition of GX-Life Global, Inc. (“GX-Life”). See Note 3. Through GX-Life, we sell high quality consumer products such as personal care, wellness, and quality-of-life products under the brand, “GX-Life”. Our sales, although limited, were previously made via a direct-selling membership program and through e-commerce channels. Our direct-selling program includes a reward program featuring a digital currency (the “GX Coin”) we access through an agreement with Great Coin, Inc. (“Great Coin”). See Note 6. During the fourth quarter of 2016, we suspended the direct-selling program for reasons associated with the detention of our CEO described above.

OnWe ~~April~~currently ~~17,~~are ~~2015,~~pursuing ~~our~~relationships ~~Company and Sky Rover~~with ~~Holdings, Ltd.,~~ a ~~corporation~~number ~~formed under the laws~~ of ~~the~~sales ~~Republic~~organizations ofwho ~~Seychelles~~can ~~(“Sky~~purchase ~~Rover”)~~our ~~completed~~existing ~~the~~inventory ~~closing of~~for aresale ~~Stock~~purposes ~~Purchase~~in ~~Agreement~~an ~~(the~~attempt ~~“SPA”)~~to ~~whereby~~establish ~~certain~~a ~~unaffiliated~~wholesale relationship ~~parties~~with ~~that~~these ~~contributed~~organizations. ~~cash,~~This ~~E-Gold~~would ~~coin~~allow ~~(“EGD”) crypto-assets,~~us ~~and other consideration~~ to ~~complete~~take ~~the~~advantage ~~SPA~~of ~~(including~~established ~~the~~sales ~~shares~~networks ~~issued~~and, toif ~~Mr. Lei Pei as described below) (collectively~~successful, ~~the~~create ~~“Acquiring~~a ~~Shareholders”)~~sustainable ~~cumulatively~~stream ~~acquired~~of ~~approximately 87~~revenue.3% ofWe ~~the~~believe ~~outstanding~~this ~~shares~~approach ofgives ~~stock~~us ofthe ~~our~~best ~~Company in~~opportunity ~~exchange~~ for ~~our~~future ~~receipt~~success ofat ~~$400,000 in cash and~~ the ~~contribution of 4,000,000 EGD to our wholly-owned subsidiary, Global Modern~~least ~~Enterprise Limited, a Hong Kong entity (the “EGD Subsidiary”)~~cost. ~~Additionally,~~There ~~Sky~~is ~~Rover’s~~no ~~officer,~~assurance ~~Mr.~~that ~~Lei~~we ~~Pei, provided~~will ~~the~~be ~~initial~~successful ~~down~~in ~~payment~~this ~~for the purchase of Powerdyne~~endeavor.

InFor ~~connection~~a ~~with~~more ~~the~~detailed ~~closing~~description of ~~the~~our ~~SPA~~business, ~~Mr.~~please ~~Lei~~see ~~Pei~~the ~~purchased~~section 6titled,~~000,000~~ ~~newly-issued~~“Business ~~shares~~Summary” ofunder ~~our~~Part ~~common stock for $3~~I,~~000,000~~ inItem ~~cash in a separate transaction that closed on March 30, 2015, which was meant to provide working capital for our anticipated expansion programs~~1. ~~On August 17, 2015, Mr~~Business. ~~Pei, resigned from our Company as its Chief Executive Officer, Chief Financial Officer and Chairman.~~

InAs ~~connection~~a ~~with~~result ~~the~~of ~~share~~recurring ~~purchase~~losses, bynegative ~~Sky~~cash ~~Rover,~~flows wefrom ~~intended~~operations ~~to market~~ and ~~deploy~~working ~~the~~capital ~~EGD~~deficiency, ~~through~~there ~~a reward program (“Rewarded EGD”). EGD~~ is a ~~crypto-asset~~substantial ~~rather than~~doubt ~~digital~~about ~~currency~~the ~~because~~Company’s ~~unlike~~ability ~~digital~~to ~~currency, users cannot purchase goods or services with EGD or use EGD~~ continue as a ~~medium of~~going ~~exchange~~concern. InWe ~~order~~intend to ~~ensure~~fund ~~compliance~~our operations with ~~existing~~additional ~~securities~~equity ~~regulations,~~and/or ondebt ~~February~~financing. ~~10,~~Management ~~2015~~is wealso ~~filed~~making ~~a Request for No-Action~~efforts ~~Relief~~to ~~(the~~increase ~~“No-Action~~revenue ~~Letter”)~~generating ~~with~~activities though the ~~Securities~~pursuit ~~and~~of ~~Exchange~~wholesale ~~Commission~~relationships ~~(“SEC”)~~with tointerested ~~obtain~~sales ~~clarification~~organizations. If ~~that~~we ~~the~~cannot ~~SEC~~raise ~~will~~additional ~~not~~short ~~recommend~~term ~~enforcement~~capital, ~~action~~we ~~against~~may ~~our~~consume ~~Company~~all ~~and~~of ~~its~~our ~~related~~cash ~~subsidiaries~~reserved ~~regarding~~for ~~our~~operations. ~~use~~There ofare ~~the~~no ~~EGD.~~assurances ~~Despite~~that ~~several~~management ~~inquiries~~will ~~made~~be byable ~~our~~to ~~Company,~~raise wecapital ~~did~~on ~~not~~terms ~~receive~~acceptable ato ~~substantive~~the ~~response~~Company ~~from~~or ~~the~~at ~~SEC~~all. onThe ~~the~~consolidated ~~No-Action~~financial ~~Letter.~~statements ~~This~~do ~~led~~not ~~management~~include toany ~~elect~~adjustments relating to ~~rescind~~ the ~~previous~~recoverability ~~contribution~~and classification of ~~EGD~~recorded ~~and~~asset toamounts ~~focus~~or on the ~~acquisition~~amounts ofand ~~GX-Life as described~~classification ~~below.~~of Asliabilities athat ~~result,~~would onbe ~~October~~necessary 9,if ~~2015,~~ we ~~withdrew~~are ~~the~~unable ~~No-Action~~to ~~Letter~~continue ~~from~~as ~~consideration~~a bygoing ~~the SEC~~concern.

252. Basis of Presentation and Significant Accounting Policies

GXThe preparation of these financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts in the financial statements and disclosures of contingent assets and liabilities. On an on-~~Life~~going ~~Acquisition~~basis, we evaluate all of these estimates and assumptions. The most important of these estimates and assumptions relate to revenue recognition including reserves for right of return, inventory valuation, collectability of receivables, impairment assessments on long-lived assets, and the valuation of stock compensation and awards. Although these and other estimates and assumptions are based on the best available information, actual results could be different from these estimates. The policies discussed below include those that management has determined to be the most appropriate in preparing our consolidated financial statements.

On October 2, 2015, we completed a Share Exchange Agreement with GX-Life, whereby we spun-off 100% of our ownership interest in the EGD Subsidiary (including 4,000,000 EGD) in exchange for 100% of the outstanding common stock of GX-Life. In a related transaction, on October 2, 2015, the former shareholders of GX-Life sold all of their interests in the EGD Subsidiary to the Acquiring Shareholders in the Sky Rover SPA in exchange for 21,280,000 shares of our Company’s common stock previously acquired in the Sky Rover SPA. Collectively these two transactions are referred to as the “GX-Life Transactions”. As a result of the GX-Life Transactions, much of the Sky Rover SPA has been effectively unwound and the 4,000,000 EGD crypto-assets are no longer owned or controlled by our Company or any of our subsidiaries.

The GX-Life Transactions effectuated a change in control of our Company, as the former shareholders of GX-Life, including Michael Dunn, Ning Liu and Tomoe Masuya, acquired 21,280,000 shares of our common stock representing an aggregate voting power of 45.9%.

Form S-1 Registration Statement

On May 8, 2015, we filed a Form S-1 Registration Statement under the Securities Act of 1933 (“S-1”) with the SEC for the initial registration of 10 million shares of our common stock, and the S-1 has been declared effective by the SEC. The offering is priced at $3.50 per share. Subsequent to December 31, 2015, we arranged for the sale of 1,000,000 shares under the S-1 for a total of $3,500,000. In that regard, we have received $999,975 to date and we are in the process of finalizing the remaining paperwork and funding with respect to the sale.

Management Plans

During 2015, our Company entered into various corporate transactions and started setting up our direct selling program. As such, no revenues were derived in 2015 and the Company’s annual expenditures are greater than cash reserves at year end. Such conditions raise substantial doubt about our ability to continue as a going concern. In 2016 we have started generating revenues and have received substantial direct selling program membership deposits which help fund operations. In addition, through the date of issuance, we have raised approximately $3.5M through the sale of our common shares, approximately $1.0 million of which has been received as described above. Accordingly, based on anticipated future expenditures, cash on hand at year end, and receipts subsequent to year end, we believe any substantial doubt about our ability to continue as a going concern has been alleviated.

2. Significant Accounting Policies

Accounting policies refer to specific accounting principles and the methods of applying those principles to fairly present our financial position and results of operations in accordance with generally accepted accounting principles. The policies discussed below include those that management has determined to be the most appropriate in preparing our consolidated financial statements

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Global Future City Holding Inc. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Management makes estimates and assumptions that affect the amounts reported in the consolidated financial statements and footnotes. Actual results could differ from those estimates.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Our significant estimates relate to revenue recognition, ~~inventory valuation, reserves~~including reserves for right of return, oninventory ~~revenues~~valuation, ~~impairment~~collectability of receivables, impairment assessments on long-lived assets, and the valuation of stock compensation and awards.

Concentrations of Credit Risks

We will invest any cash balances we may have through high-credit quality financial institutions. From time to time, we may maintain bank account levels in excess of FDIC insurance limits. If the financial institution in which we have our accounts has financial difficulties, any cash balances in excess of the FDIC limits could be at risk.

Accounts receivable at December 31, 2014 was from one customer. There was no accounts receivable at December 31, 2015.

Cash and Cash Equivalents

We consider all highly liquid investments with original maturities of 90 days or less to be cash equivalents.

Allowances for Doubtful Accounts

We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. We consider the following factors when determining if collection of required payments is reasonably assured: customer credit-worthiness, past transaction history with the customer, and current economic industry trends. As of December 31, ~~2015~~2016 and ~~2014~~2015, there were no allowances for doubtful accounts.

Inventories

Inventories are valued at the lower of first-in, first-out, cost or market value (net realizable value). We regularly review our inventory quantities on hand and record a provision for excess and slow moving inventory based primarily on our estimated forecast of product demand and related product expiration dates.

Deferred Financing Costs

The costs incurred in connection with the Form S-1 Registration Statement will be netted against the proceeds we expect to receive in connection therewith.

Property and Equipment, net

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life of five years. Significant renewals and betterments are capitalized while maintenance and repairs are charged to expense as incurred. Leasehold improvements are amortized on the straight-line basis over the lesser of their estimated useful lives or the term of the related lease.

Internal Use Software

We incur software development costs to develop software programs to be used solely to meet our internal needs and cloud-based applications used to deliver our services. In accordance with ASC 350-40, Internal-Use Software, we capitalize development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the function intended.

Impairment of Long-Lived Assets

Fair Value of Financial Instruments

We follow the guidance of ASC 820 – Fair Value Measurement and Disclosure. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of our Company. Unobservable inputs are inputs that reflect our Company’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value:

Level 1. Observable inputs such as quoted prices in active markets;

Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Our financial instruments consisted primarily of (level 1) accounts payable, accrued expenses and deposits, accrued compensation, membership deposits and accrued benefits, deferred revenue and notes payable. The carrying amounts of our financial instruments generally approximate their fair values due to the short term nature of these instruments.26

AsOur financial instruments consisted primarily of ~~December~~(level 311) accounts payable, ~~2015~~accrued expenses and ~~2014~~deposits, weand ~~did~~notes ~~not~~payable. ~~have~~The ~~any~~carrying ~~level~~amounts 2of orour financial instruments generally approximate 3their ~~assets~~fair orvalues ~~liabilities~~due to the short term nature of these instruments.

As of December 31, 2016 and 2015, we did not have any level 2 or 3 assets or liabilities.

Deferred Rent

Our Company accounts for lease rentals that have escalating rents on a straight-line basis over the life of each lease. This accounting generally results in a deferred liability (for the lease expense) recorded on the balance sheet.

Debt Issued with Common Stock

Debt issued with common stock is accounted for under the guidelines established by ASC 470-20 – Accounting for Debt With Conversion or Other Options. We record the relative fair value of common stock related to the issuance of convertible debt as a debt discount or premium. The discount or premium is subsequently amortized to interest expense over the expected term of the convertible debt.

Convertible Debt

We account for free-standing derivative instruments and hybrid instruments that contain embedded derivative features in accordance with ASC Topic 815, Accounting for Derivative Instruments and Hedging Activities, as well as related interpretations of this topic. In accordance with this topic, derivative instruments and hybrid instruments are recognized as either assets or liabilities in the balance sheet and are measured at fair values with gains or losses recognized in earnings. Embedded derivatives that are not clearly and closely related to the host contract are bifurcated and are recognized at fair value with changes in fair value recognized as either a gain or loss in earnings. We determine the fair value of derivative instruments and hybrid instruments based on available market data using appropriate valuation models, giving consideration to all of the rights and obligations of each instrument. We record all of these liabilities at their fair value at issuance and adjust the liabilities quarterly to reflect changes in their fair value.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Due to historical net losses, a valuation allowance has been established to offset the deferred tax assets.

Revenue Recognition

Revenue from product sales are recorded when the products are shipped and title passes to independent members. Net revenues are determined after deducting promotional and other allowances in accordance with ASC 605-50. Product sales to members are made pursuant to a member agreement that provides for transfer of both title and risk of loss upon our delivery to the carrier that completes delivery to the members. This is commonly referred to as “F.O.B. Shipping Point.” Amounts received for unshipped product are recorded as deferred revenue. Our sales arrangements do not contain right of inspection or customer acceptance provisions other than general rights of return. We estimate and accrue a reserve for product returns based on our return policies and historical experience, with the expense recorded as a reduction to revenue.

Cash receipts for enrollment packages include nonrefundable enrollment fees for all new members and an additional deposit for upgrading to a VIP status if a member so chooses~~. The nonrefundable enrollment~~ ~~fee,~~under ~~is deferred and recognized over~~ the ~~term~~terms of the ~~arrangement,~~compensation ~~generally~~plan ~~twelve~~that ~~months.~~was ~~The VIP status upgrade is a deposit which is repayable to a member either~~ in ~~cash,~~effect ~~product~~during orthe ~~convertible~~second ~~into~~quarter GXof ~~Coins.~~2016 ~~There is no revenue associated with~~ (the ~~VIP status~~“Q2 ~~upgrade deposit~~Plan”). ~~Enrollment~~The nonrefundable ~~packages~~enrollment ~~provide~~fee ~~members~~is ~~access~~deferred ~~to both a personalized marketing website~~ and arecognized ~~business~~over ~~management system.~~the Noterm ~~upfront~~of ~~costs are deferred as~~ the ~~amount~~arrangement, isgenerally ~~nominal~~twelve months.

For members under the Q2 Plan, a VIP status upgrade is a deposit which is repayable to a member either in cash, product, or convertible into GX Coin. There is no revenue associated with a VIP status upgrade deposit initially; however, related party revenue is recognized on the commission earned when VIP members under the Q2 Plan convert their membership or rewards points into GX-Coin. A VIP status upgrade earns reward status points that are also subject to repayment in cash or convertible into GX Coin. Pursuant to ASC 605-50, a cost and liability for amounts owed in cash or cash equivalents benefits under nondiscretionary loyalty programs should be accrued with a related contra-revenue, as by transferring the right to cash or cash equivalent benefits, the entity effectively reduces the revenue from conversions of VIP status and related accrued benefits to GX Coin. Each VIP member entering the Q2 Plan through the second quarter of 2016 have elected to convert their respective deposit to GX-Coin by such time or during the third quarter of 2016. The Company recognizes revenue on the conversion upon the completion of our performance obligation as part of the conversion process, at which point all necessary revenue recognition criteria have been met.

Based on industry developments and best practices of direct selling programs, GX-Life implemented a revised compensation plan on July 15, 2016, and finalized and released such plan on August 1, 2016 (the “GX-Life Global Compensation Plan”). The GX-Life Global Compensation Plan removed the VIP status upgrade deposits and accordingly, the revenues from the conversion of VIP status upgrade deposits is expected to cease during the 2016 year after all deferrals are recognized.

From time to time, GX-Life may make modifications and enhancements to the GX-Life Global Compensation Plan to help motivate GX-Life Members. GX-Life may also enter into agreements for business or market development, which may result in additional compensation to specific GX-Life Members. GX-Life intends to continue to examine and adjust the GX-Life Global Compensation Plan to reflect marketplace competition, demand, and U.S. regulations and foreign jurisdictions. Because of this, GX-Life recognizes that the compensation and rewards available under the GX-Life Global Compensation Plan may be different across different jurisdictions.

Shipping and Handling

Shipping and handling costs are recorded as a cost of net revenue and are expensed as incurred.

Commissions

Members of our direct-selling program primarily earn commissions based on total personal and group sales volume and also based on their VIP status. Members may also earn incentives, which may be both monetary and non-monetary in nature, based on meeting certain qualifications during a designated incentive period. We accrue commissions, including our estimate of costs associated with the incentives, when earned and pay commissions generally within the agree-to timeframe following the end of the applicable sales or incentive period.

Net Income (Loss) per Share

We present basic income (loss) per share (“EPS”) ~~and~~ and diluted EPS on the face of the consolidated statement of operations. Basic loss per share is computed as net loss divided by ~~the~~ the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could ~~occur~~ occur from common shares issuable through stock options, warrants, and other convertible securities. At December 31, ~~2015~~2016 and ~~2014~~2015, we we had no outstanding options or warrants to purchase any of our common shares, respectively. As of December 31, ~~2014,~~2016 ~~we had certain debt with conversion features, which was convertible into approximately 1,346,191 shares of common stock. We added these dilutive shares to the denominator~~ and ~~added back approximately $18,000 of related interest in the numerator for weighted average diluted earnings per share. As of December 31,~~ 2015, we had convertible debt; however, the effects of the convertible debt would have been anti-dilutive due to loss in the period.

Stock-Based Compensation

We account for our stock-based compensation in accordance with ASC 718 – Stock Compensation. We account for all stock-based compensation using a fair-value method on the grant date and recognize the fair value of each award as an expense over the requisite vesting period.

Accounting for Equity Instruments Issued to Non-Employees

We account for our equity-based payments to non-employees under ASC 505 – Equity. The fair value of the equity instrument issued or committed to be issued is used to measure the transaction, as this is more reliable than the fair value of the services received. The fair value is measured at the value of our common stock on the date the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. The fair value of the equity instrument is charged directly to the statement of operations and credited to common stock and/or additional paid-in capital as appropriate.

~~Recent~~Fees ~~Accounting~~Paid ~~Pronouncements~~in a Cloud Computing Arrangement

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”.Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated standard will replace most existing revenue recognition guidance under U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. The updated standard will be effective for us beginning January 1, 2018. We are currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.

In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements—Going Concern", which requires management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. ASU 2014-15 is effective for annual periods ending after December 15, 2016 and interim periods thereafter. Early application is permitted. Management is still in the process of assessing the impact of ASU 2014-15 on our consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-05 “Intangibles-Goodwill and Other-Internal-Use Software.” The standard amended the existing accounting standards for intangible assets and provides explicit guidance to customers in determining the accounting for fees paid in a cloud computing arrangement, wherein the arrangements that do not convey a software license to the customer are accounted for as service contracts. The pronouncement is effective for reporting periods beginning after December 15, 2015. We early adopted ASU 2015-05 and applied service contract treatment to the Software License and Service Agreement (Note 6) as we do not have the right to take possession of the software, and thus the contract is deemed a service contract.

InRecent ~~November~~Accounting 2015, the FASB issued ASU No. 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes, which requires deferred tax liabilities and assets to be classified as noncurrent in a classified statement of financial position. ASU 2015-17 will align the presentation of deferred income tax assets and liabilities with International Financial Reporting Standards. The new standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those annual years, and early application is permitted. The adoption of this standard is not expected to have a material impact on our consolidated financial statements.Pronouncements

InFrom ~~February~~time ~~2016~~to time, the FASB ~~issued~~issues ~~ASU~~ASUs ~~No. 2016-02, Leases, that requires organizations that lease assets, referred~~ to asamend ~~“lessees”, to recognize on~~ the ~~balance sheet~~authoritative ~~the~~literature ~~assets~~in ~~and~~ASC. ~~liabilities~~Management ~~for~~believes ~~the~~that ~~rights and obligations created by~~ those ~~leases~~issued ~~with~~to ~~lease~~date ~~terms~~that ofare ~~more~~not ~~than~~described 12below ~~months.~~either ~~ASU~~(i) ~~2016-02~~provide ~~will~~supplemental ~~also~~guidance, ~~require~~(ii) ~~disclosures~~are totechnical ~~help investors and other financial statement users better understand the amount~~corrections, ~~timing, and~~(iii) ~~uncertainty~~are ofnot ~~cash~~applicable ~~flows~~to ~~arising~~us ~~from~~or ~~leases~~(iv) ~~and~~are ~~will~~not ~~include~~expected ~~qualitative and quantitative requirements. The new standard~~to ~~will~~have bea ~~effective~~significant ~~for fiscal years beginning after December 15, 2018, including interim periods within those annual years, and early application is permitted. We are currently assessing the~~ impact ~~that this standard will have on~~ our consolidated financial statements.

~~The~~Revenue Recognition. In May 2014, the FASB ~~issues~~issued ~~ASUs~~Accounting toStandards ~~amend~~Update ~~the~~(“ASU”) ~~authoritative~~2014-09, “Revenue from ~~literature~~Contracts inwith ~~ASC~~Customers”. ~~There~~ Under ~~have~~this ~~been~~guidance, arevenue ~~number~~is ofrecognized ~~ASUs~~when promised goods or services are transferred to ~~date,~~customers ~~including~~in ~~those~~an ~~above,~~amount that ~~amend~~reflects the ~~original~~consideration ~~text~~that ofis ~~ASC.~~expected ~~Management~~to ~~believes~~be ~~that~~ received for those ~~issued~~goods toor ~~date~~services. The ~~either~~updated ~~(i)~~standard ~~provide~~will ~~supplemental~~replace most existing revenue recognition guidance, ~~(ii)~~under ~~are~~U.S. ~~technical~~GAAP ~~corrections,~~when ~~(iii)~~it ~~are~~becomes ~~not~~effective ~~applicable~~and topermits the ususe of either the retrospective or cumulative effect transition method. Early adoption is not permitted. The updated standard ~~(iv)~~will be effective for us beginning January 1, 2018. We are ~~not~~currently ~~expected~~evaluating tothe ~~have~~effect athat ~~significant~~the ~~impact~~updated ~~our~~standard will have on its consolidated financial statements and related disclosures.

Financial Instruments. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall”. The new guidance affects the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. The guidance is effective for annual and interim periods beginning after December 15, 2017. The guidance on financial liabilities under the fair value option did not have a significant impact on our consolidated financial statements.

Leases. In February 2016, the FASB issued ASU No. 2016-02, Leases, that requires organizations that lease assets, referred to as “lessees”, to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with lease terms of more than 12 months. ASU 2016-02 will also require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases and will include qualitative and quantitative requirements. The new standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those annual years, and early application is permitted. We are currently assessing the impact that this standard will have on our consolidated financial statements.

Share-Based Payments to Employees. In March 2016, the FASB ASU 2016-09, “Improvements to Employee Share-based Accounting”, new guidance to simplify and improve accounting for share-based payments. The amendments include income tax consequences, the accounting for forfeitures, classification of awards as either equity or liabilities and classification on the statement of cash flows. The guidance is effective for annual and interim periods beginning after December 15, 2016. We do not believe the adoption of this accounting guidance will have a material effect on our consolidated financial statements.

Cash Flow Classifications. In August 2016, the FASB issued ASU 2016-15 providing new guidance to reduce the diversity in practice in how certain transactions are classified in the statement of cash flows. The guidance adds or clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows. The guidance is effective for annual and interim periods beginning after December 15, 2017. In November 2016, the FASB issued new guidance on restricted cash. The guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. The guidance is effective for annual and interim periods beginning after December 15, 2017. We are currently evaluating the impact this new guidance will have on our consolidated financial statements.

3. Acquisitions

Sky Rover Stock Purchase Agreement

On ~~September~~April 1917, ~~2014~~2015, weour ~~entered~~Company ~~into~~and ~~the “~~Sky Rover Holdings, ~~SPA~~Ltd., Ata ~~closing,~~corporation formed under the laws of the Republic of Seychelles (“Sky Rover”) ~~was~~completed tothe ~~acquire~~closing of ~~30,400,000~~a ~~shares~~Stock Purchase Agreement (the “~~Shares~~SPA”) ofwhereby ~~our~~certain ~~common~~unaffiliated ~~stock~~parties ~~which~~that contributed cash, E-Gold coin (“EGD”) ~~was~~crypto-assets, and other consideration to ~~equal~~complete ~~approximately~~the ~~80%~~SPA of(including the ~~then~~shares issued to Mr. Lei Pei as described below) (collectively, the “Acquiring Shareholders”) cumulatively acquired 30,400,000 of the outstanding shares of ~~common~~ stock of our Company (approximately 87.3%) Inin ~~consideration~~exchange for our receipt of $400,000 in cash and the ~~Shares~~contribution of 4,000,000 ~~Sky~~EGD to our wholly-owned subsidiary, Global ~~Rover~~Modern ~~was~~Enterprise toLimited, ~~pay~~a Hong Kong entity (the “EGD Subsidiary”). To complete the transaction, 29,868,649 of the common shares acquired were conveyed by certain affiliated and unaffiliated existing shareholders and 3,371,351 were newly issued. Prior to usthe aclosing, ~~total~~Sky Rover advanced $539,885, consisting of the $400,000 purchase price and $139,885 towards reimbursement of certain corporate costs. Additionally, Sky Rover’s officer, Mr. Lei Pei, provided the initial down payment for the purchase of Powerdyne.

In connection with the closing of the SPA, Mr. Lei Pei purchased 6,000,000 newly-issued shares of our common stock for $3,000,000 in cash in a separate transaction that closed on March 30, 2015, which was meant to provide working capital for our anticipated expansion programs. On August 17, 2015, Mr. Pei, resigned from our Company as its Chief Executive Officer, Chief Financial Officer and Chairman.

Also in connection with the share purchase by Sky Rover, we intended to market and deploy the EGD through a reward program (“Rewarded EGD”). In order to ensure compliance with existing securities regulations, on February 10, 2015 we filed a Request for No-Action Relief (the “No-Action Letter”) with the Securities and Exchange Commission (“SEC”) to obtain clarification that the SEC will not recommend enforcement action against our Company and its related subsidiaries regarding our use of the EGD. Despite several inquiries made by our Company, we did not receive a substantive response from the SEC on the No-Action Letter. This led management to elect to rescind the previous contribution of EGD and to focus on the acquisition of GX-Life as described below. As a result, on October 9, 2015, we withdrew the No-Action Letter from consideration by the SEC.

OnThe ~~February~~acquisition ~~17,~~of ~~2015,~~the weEGD ~~amended~~is ~~the~~considered ~~terms~~an ofasset purchase for accounting purposes based on the ~~Sky~~guidance ~~Rover~~of ~~SPA~~ASC (805 - Business Combinations, as the ~~“Amended~~EGD ~~SPA”)~~does not have features of a business nor does it have any operations. ~~According~~Due to management’s election to effectively rescind the ~~terms~~contribution of EGD and to focus on the ~~Amended~~acquisition ~~SPA~~of GX-Life Global, ~~Sky~~we ~~Rover~~recorded ~~agreed~~the tovalue ~~deposit~~of ~~4,000,000~~ the EGD ~~into~~as of the ~~EGD~~date ~~subsidiary~~of acquisition at $0.

OnGX-Life April 17, 2015, our Company and Sky Rover completed the closing of the Sky Rover SPA. As a result, Sky Rover’s designees received 33,240,000 shares of our common stock of which 3,371,351 were newly issued and 29,868,649 were conveyed by certain affiliated and unaffiliated existing shareholders to complete the transaction. Prior to the closing, Sky Rover advanced $539,885, consisting of the $400,000 purchase price and $139,885 towards reimbursement of certain corporate costs.Acquisition

~~The~~On ~~acquisition~~October 2, 2015, we completed a Share Exchange Agreement with GX-Life, whereby we spun-off 100% of our ownership interest in the EGD isSubsidiary ~~considered~~(including an4,000,000 ~~asset~~EGD) ~~purchase~~in exchange for 100% of the outstanding common stock of GX-Life. GX-Life is a consumer products business, which was primarily owned by our ~~accounting~~former ~~purposes~~CEO, ~~based~~Ning onLiu, ~~the~~and ~~guidance~~our current CEO, Michael Dunn. As part of ~~ASC~~their ~~805~~marketing strategy, GX-Life ~~Business~~had ~~Combinations~~developed a robust, scalable network marketing platform that utilizes iMatrix’s software to support direct selling opportunities throughout the world. In Wea ~~recorded~~related transaction, on October 2, 2015, the ~~value~~former shareholders of ~~the~~GX-Life ~~EGD~~sold asall of their interests in the ~~date~~EGD Subsidiary to the Acquiring Shareholders in the Sky Rover SPA in exchange for 21,280,000 shares of ~~acquisition~~our atCompany’s $0common asstock ~~its~~previously acquired ~~value~~in ~~was~~the ~~highly~~Sky ~~uncertain~~Rover ~~due~~SPA. Collectively these two transactions are referred to ~~various~~as ~~restrictions~~the on“GX-Life ~~its~~Transactions”. ~~use~~As a result of the GX-Life Transactions, much of the Sky Rover SPA has been effectively unwound and ~~our~~the ~~ability~~4,000,000 toEGD ~~exploit~~crypto-assets are no longer owned or controlled by our Company or any ~~value~~of our subsidiaries.

The GX-Life Transactions effectuated a change in control of our Company, as the former shareholders of GX-Life acquired 21,280,000 shares of our common stock representing an aggregate voting power of 45.9%. Individually, (i) Michael Dunn acquired an additional 24.1% voting power of our common stock, (ii) Ning Liu acquired 2.6% voting power of our common stock, and (iii) Tomoe Masuya acquired an additional 26.65% voting power of our common stock. The former shareholders of GX-Life Global are all unaffiliated from one another, and none of them have a beneficial interest or hold any ownership interest in each other's entity and disclaim status as a "group" as defined by SEC Rules.

On October 2, 2015, we completed a Share Exchange Agreement with GX-Life, whereby we spun-off 100% of our ownership interest in the EGD Subsidiary (including 4,000,000 EGD), which we had valued at $0, in exchange for 100% of the outstanding common stock of GX-Life. In accordance with ASC 805, we have included the financial results of GX-Life in our consolidated financial statements as of the date of acquisition. The assets and liabilities of GX-Life assumed on the acquisition date were recorded at fair value, which approximated the carrying value, and are included in the consolidated financial information post-merger. Following is a summary of the assets and liabilities assumed as of the acquisition date:

Assets:
Cash	$	100
Deposits for inventory		491,988
Other deposits		5,700
Total assets		497,788
Liabilities:
Accounts payable		19,298
Due to related parties		495,737
Total liabilities		515,035
Net liabilities assumed	$	17,247
Net liabilities in excess of assets	$	17,247

Following is pro-forma revenue and earnings information for the year ended December 31, 2015 assuming both our Company and GX-Life had been combined as of September 1, 2015, the date of formation of GX-Life. Amounts are unaudited:

Net revenue	$	0
Net loss		(928,033	)
(Loss) before income taxes	$	(927,233	)

~~Acquisition~~Our ofdirect-selling ~~Powerdyne~~program includes a reward program featuring a digital currency (the “GX Coin”) we access through an agreement with Great Coin, Inc. (“Great Coin”). See Note 6.

In March 2015, we acquired 100% of the membership interests in Powerdyne, an EB-5 Regional Center. We plan to raise funding for real estate development projects through the EB-5 Regional Center, a vehicle designated by the USCIS as eligible to receive immigrant investor capital to promote economic growth, improve regional productivity, create jobs, and increase domestic capital investment.

The purchase price was $250,000, of which $150,000 was contributed by our former CEO Lei Pei. We paid an additional $50,000 and the remaining installments of $25,000 each are due on January 1, 2016 and April 1, 2016 (collectively “Installment Payments”).

As collateral for the timely payment of the Installment Payments, we pledged and granted a security interest in the acquired membership interest of Powerdyne to the seller, until such time all Installment Payments have been made.

Powerdyne Acquisition

On March 26, 2015, we entered into a Membership Interest Purchase and Sale Agreement with Powerdyne, Inc., an entity which owned 100% of the membership interests in Global Future City Regional Center, LLC, formerly Powerdyne LLC (“Powerdyne” or “Regional Center”). Powerdyne is an EB-5 Regional Center (USCIS ID Number 1215250671) that was approved by the USCIS on March 28, 2013. The purchase price was $250,000, of which $150,000 was contributed by our former CEO Lei Pei. The acquisition closed on March 27, 2015. As an EB-5 Regional Center, we intended to attract and pool investments from qualified foreign investors for the purpose of job creation within a defined geographic region.

The purchase of Powerdyne is considered an asset purchase for accounting purposes based on the guidance of ASC 805 - Business Combinations, as Powerdyne does not have features of a business nor does it have any operations. Through the Powerdyne acquisition, we acquired the right to issue licenses to projects such that the projects will benefit from its regional center approved status.

We have ~~included~~been unable to find an EB-5 investment project that meets our internal criteria and, given the ~~capitalized~~difficulties ~~amount~~caused asby Mr. Liu’s alleged actions discussed in Note a1, ~~separate~~we ~~line~~believe ~~item~~our investment in the ~~accompanying~~Regional ~~consolidated~~Center ~~balance~~became ~~sheet~~significantly asimpaired. Consequently, during the fourth quarter of ~~December~~2016 we 31commenced evaluating alternative strategies to utilize or sell the Regional Center. Because of the inactivity of the Regional Center, ~~2015~~the USCIS has deemed it frozen and the value the license would have to a third party may be minimal. We may not be able to utilize or find a buyer for the EB-5 Regional Center and cannot determine at this point whether it has any value at all. Accordingly, a full impairment was deemed necessary.

We have included the capitalized amount as a separate line item in the accompanying consolidated balance sheet as of December 31, 2016 and 2015 and a separate line for the impairment in the accompanying consolidated statements of operations.

4. Inventories

Inventories on hand at December 31, ~~2014~~ 2016 consist of finished goods. Because of the difficulties associated with Mr. Liu’s legal challenges in the PRC, we have suspended ~~from~~our direct-selling program and reduced the value of our ~~previous~~inventory ~~F.I.T.T.~~to ~~brand~~its ~~energy~~net ~~shots.~~realizable ~~Deposits~~value ~~for~~resulting ~~inventories~~in atan ~~December~~impairment 31charge of $1,122,520 ~~2015~~during ~~are~~2016. ~~down~~The ~~payments~~impairment ~~for~~estimate ~~products~~was based on the movement of products to date, negotiations with third party to purchase certain inventory, and expiration dates of perishable goods that our ~~new~~Company ~~direct-~~may have difficulty selling ~~business~~in ~~which~~a ~~were~~timely manner. ~~shipped~~In addition, we had made deposits of $242,777 for future deliveries of inventory to uscompanies inthat went out of business or declared bankruptcy. During the ~~first~~fourth quarter of 2016 we wrote-off these deposits as bad debts as the ability to receive inventory or recoup deposits is in doubt.

Deposits for inventories at December 31, 2015 are down payments for products of our new direct-selling business which were shipped to us in the first quarter of 2016.

5. Property and Equipment, net

Property and equipment, net consist of the following at December 31:

	2015			2014
	2016			2015
Furniture	$	~~103~~374,~~515~~299		$	6103,~~536~~515
Computers		10107,~~001~~790			1110,~~091~~001
Software		62101,~~610~~330			1662,~~894~~610
Leasehold improvements		8089,~~638~~765			—80,638
		256,764			34,521
		673,184			256,764
Less accumulated depreciation		(7124,~~439~~165	)		(287,~~462~~439	)
	$	~~249~~549,~~325~~019		$	6249,~~059~~325

~~Property and equipment, net amounts shown above include $244,179 in items not placed into service until 2016, primarily as a result of our move into our current office facility.~~ Depreciation expense was $695,~~367~~482 and $6,~~110~~ 367 for the years ended December 31, ~~2015~~2016 and ~~2014~~2015, respectively.

~~6. Software License and Services Agreement~~31

~~As described in Note 1 under the caption Sky Rover Stock Purchase Agreement, we had previously intended to market the EGD through a reward program~~6. ~~GX-Life has determined that incorporating~~ Service aContract ~~crypto-asset~~– ~~other~~Related than EGD into a reward program would be important to its success. As a result, on October 21, 2015, GX-Life entered into a $2.5 million Subscription Agreement with Great Coin under which it made an initial purchase of 700,000 GX Coins for $350,000. However, the purchase was never consummated because the Subscription Agreement was subsequently superseded and replaced by way of a February 17, 2016 Software License and Services Agreement with Great Coin (the “Software License Agreement”) under which Great Coin granted a license for the GX Coins for an upfront license fee of $350,000 which was deemed paid by the payment made in October 2015 and the remaining obligations under the Subscription Agreement were canceled. The agreement was accounted for under newly adopted ASU 2015-05 as documented in Note 2. The GX Coins are a digital currency, a form of crypto-asset, which we are incorporating into a reward program for our consumer products sales programs.Party

~~Under~~As described in Note 3 under the ~~Software~~caption ~~License~~Sky Rover Stock Purchase Agreement, ~~which~~we ~~has~~had previously intended to market the EGD through a ~~term~~reward ofprogram. 10GX-Life ~~years,~~determined ~~members~~that ofincorporating ~~our~~a ~~consumer~~crypto-asset ~~product~~other ~~sales~~than ~~programs~~EGD ~~may~~into ~~elect~~a reward program for its direct selling program would be important to its ~~convert~~success. ~~status~~As ora ~~rewards~~result, ~~points~~on October 21, 2015, GX-Life entered into a $2.5 million Subscription Agreement with Great Coin under which it made an initial purchase of 700,000 GX Coins atfor ~~agreed-to~~$350,000. ~~conversion~~However, the purchase was never consummated because ~~rates.~~the ~~When~~Subscription aAgreement ~~member~~was ~~converts~~subsequently ~~status~~superseded orand ~~reward~~replaced ~~points,~~by weway ~~will~~of ~~record~~a ~~revenues~~February 17, ~~excluding~~2016 Software License and Services Agreement with Great Coin (the ~~conversion~~“Services ~~fee~~Contract”) ~~payable~~under towhich Great Coin, ~~equal~~granted toa ~~80%~~license offor the ~~conversion~~GX Coins ~~amount,~~for upan toupfront license fee of $4350,000~~,000~~ which was deemed paid by the payment made in ~~total~~October ~~conversion~~2015 ~~amounts~~and the remaining obligations under the Subscription Agreement were canceled. The agreement was accounted for under ASU 2015-05 as documented in Note 2. The GX Coins are a digital currency, ~~and~~a ~~50%~~form of ~~the~~crypto-asset, ~~conversion~~which ~~amount~~we ~~thereafter~~are incorporating into a reward program for our consumer products sales programs.

WeUnder ~~have classified~~ the ~~$350~~Services Contract,~~000~~ aswhich has a ~~separate~~term ~~line~~of ~~item~~10 inyears, members of our ~~consolidated~~direct ~~balance~~selling ~~sheet~~program ~~and~~may itelect ~~will~~to beconvert ~~amortized~~certain onmembership aaccount ~~straight~~balances into GX Coins at agreed-~~line~~to conversion ~~basis~~rates. ~~over~~When a member converts status or reward points, we will record revenues, excluding the ~~expected~~conversion ~~period~~fee payable to Great Coin, equal to 80% of ~~benefit~~the conversion amount, up to $4,000,000 in total conversion amounts, and 50% of the conversion amount thereafter.

We had classified the $350,000 as a separate line item in our consolidated balance sheet and began amortizing it on a straight-line basis over the expected period of benefit. However, given the difficulties we’ve experienced as a result of Mr. Liu’s detention in the PRC as described in Note 1, our efforts to implement our direct selling program became significantly more difficult and we decided to suspend our direct selling program. Accordingly, although the agreement remains in place and the platform run by the Great Coin remains operational, the usage of the Service Contract has been suspended, as it is no longer being integrated with our suspended direct selling program and therefore provides no future economic benefit to the Company based on current circumstances. As a result, during the fourth quarter of 2016, we have impaired the remaining unamortized balance of the Service Contract of $280,000.

7. Accrued Expenses

Accrued expenses consist of the following at December 31:

	2015		2014
	2016		2015
Accrued interest	$	~~126~~242,~~512~~211	$	38126,~~773~~512
Accrued royalties and commissions		11,~~366~~346		11,~~666~~366
Deposit on proposed business combination		–		475,000
Deferred rent		16,358		–
Other		799		799
	$	~~138~~270,~~677~~714	$	~~526~~138,~~238~~677

During the fourth quarter of 2014, we reached settlement agreements with most all of our noteholders and we restructured their notes. The settlements included an agreement by the noteholders to forgo payment of nearly all of the interest which had been accrued but unpaid as of the dates of each settlement agreement. See Note 11 for further information.

During 2014, we first entered into agreements with Greenome, then with Sky Rover under which we agreed to sell 80% of our outstanding common stock. As part of the agreements, we received deposits from Greenome and Sky Rover to be used to mitigate debt, to acquire common stock from a major shareholder on their behalf, and to continue our operations. See Notes 3 and 16 for further information with respect to these agreements.

8. Accrued Compensation

Accrued compensation consists of the following at December 31:

	2015		2014
	2016		2015
Accrued officer’s compensation – former CEO	$	–	$	1,053,187
Accrued officer’s compensation - CEO	$	55,231	$	–
Accrued other compensation – employee		–		441,462
Accrued other compensation		70,786		–
Accrued payroll taxes – delinquent		~~211~~181,905		~~316~~211,~~044~~905
Accrued payroll taxes on accrued payroll (not yet due)		–7,355		~~185,866~~–
	$	~~211~~315,~~905~~277	$	1211,~~996,559~~905

InAs ~~prior~~further ~~years,~~discussed wein ~~made~~Note ~~minimal payments to our employees and accrued most of their compensation. In addition~~13, wein ~~have delinquent Federal and State payroll taxes incurred mainly under previous management. In 2015 we made payments of $52~~2016,~~597~~ ~~against the Federal obligation. Additionally, based on an accounting received from the Internal Revenue Service (“IRS”),~~ we ~~determined that our accrual for past-due Federal~~ ~~payroll~~issued ~~taxes~~common ~~was~~stock ~~overstated due~~ to ~~collections~~certain ~~made,~~of ~~which were unknown to us, from other responsible parties along with lower than estimated interest and penalties. As a result, at December 31, 2015, we reduced~~ our ~~liability~~employees ~~by $60,000, with $6,000 reducing interest expense accrued during 2015 and $54,000 recorded~~ as apart ~~gain on extinguishment~~ of ~~debt. In January 2016, we received approval from~~ the ~~IRS~~condition ~~for~~of atheir ~~4-year~~employment. ~~payment~~During ~~plan to repay this obligation with~~ the ~~first~~fourth ~~payment~~quarter ~~scheduled~~of ~~for April~~ 2016~~. While it is possible~~, ~~that~~ the ~~other~~employees ~~responsible~~earned ~~parties~~common ~~from~~stock ~~whom~~valued ~~the~~at ~~IRS made collections of approximately~~ $2034,~~000~~079 ~~could~~which ~~request reimbursement from our Company, we believe that possibility~~ is ~~unlikely~~included ~~and~~in ~~have~~the ~~recorded~~table noabove ~~liability~~under ~~for~~Accrued ~~such~~other ~~an event~~compensation.

We have delinquent Federal and State payroll taxes incurred mainly under previous management during the years 2006 through 2008. In 2015 we made payments of $52,597 against the Federal obligation. Additionally, based on an accounting received from the Internal Revenue Service (“IRS”), we determined that our accrual for past-due Federal payroll taxes was overstated due to collections made, which were unknown to us, from other responsible parties along with lower than estimated interest and penalties. As a result, at December 31, 2015, we reduced our liability by $60,000, with $6,000 reducing interest expense accrued during 2015 and $54,000 recorded as a gain on extinguishment of debt. In January 2016, we received approval from the IRS for a 4-year payment plan to repay this obligation with the first payment scheduled for April 2016. Due to the reduced availability of capital, we are delinquent with respect to this payment plan and are in contact with the IRS about adjusting the plan.

In 2014, in order to facilitate the investment by Sky Rover discussed in Note 1, we entered into settlement agreements with our former CEO and Controller under which they agreed to forgive all accrued but unpaid salary once all closing conditions of the Sky Rover SPA had been met. During the three months ended March 31, 2015, when all closing conditions of the Sky Rover SPA became effective, our former Chief Executive Officer and former Controller forgave all accrued compensation owed to them in accordance with settlement agreements which, along with the related accrued payroll taxes, totaled $1,673,774. This amount has been recorded as contributed capital in the accompanying consolidated financial statements due to the related party nature of the transaction.

In 2013, we merged with a private company whose CEO was our former CEO. Prior to the merger, the private company had made advances to our former CEO, either personally or to a company he owns, of $691,805, including annual interest of 6%. During the fourth quarter of 2013, our CEO repaid the advances through an agreement to surrender 668,386 shares of common stock of our post-merged company which were beneficially owned by him as part of the Merger. The shares were valued at approximately $1.04, the volume weighted adjusted price of the common stock for the 20 trading days prior to his agreement to surrender the shares. While the advances were formally relieved in fiscal 2013, the shares were surrendered during the first quarter 2014.

Effective January 14, 2014 an employee repaid certain advances made to him in 2013 in the amount of $27,551 through an agreement to surrender 27,350 shares of common stock of our post-merged company which were beneficially owned by him. The shares were valued at the volume weighted adjusted price of the common stock for the 20 trading days prior to his agreement to surrender the shares.

9. Membership Deposits and Accrued Benefits

~~Newly~~Membership ~~enrolled~~deposits ~~members~~and in our direct-selling program may elect to increase their status to one of four VIP levels by providing us a cash deposit which is refundable at the end of one year. The deposit accrues reward points at the rate of 0.001 point per day per dollar of deposit, which is equivalent to an effective annual rate of 36.5%. A member’s deposited funds, plus any accrued ~~reward~~benefits ~~points,~~activity ~~are redeemable~~ for ~~cash,~~the ~~additional Company products,~~years orended ~~GX Coins. At~~ December 31, ~~2015,~~2016 ~~one~~and ~~member~~2015 ~~had~~consists ~~made~~of athe ~~$10,000 VIP deposit.~~following:

	2016			2015
Beginning balance	$	10,020		$	–
Member deposits		5,399,812			10,000
Less: deposits repaid		(240,400	)		–
Accrued member benefits		94,920			20
Less: member conversions to GX Coins		(4,713,544	)		–
Ending balance	$	550,808		$	10,020

During 2016, our former CEO repaid certain member deposits totaling $250,000 ($240,400 in member deposits and $8,600 in enrollment fees and prepaid product purchases). We have accounted for this repayment as contributed capital.

Member conversions to GX Coins were made in conformity with the provisions of the Service Contract discussed in Note 6.

The balance at December 31, 2016 consists of the following:

	2016
Repayments requested by members	$	115,580
Conversion paperwork signed – verifying appropriate state of residency		165,219
Conversion paperwork signed – no GX Coin account established		270,009
Ending balance	$	550,808

10. Notes Payable

Notes payable consists of the following at December 31:

	2015			2014
	2016			2015
Acquisition note - Powerdyne	$	~~50,000~~–		$	–50,000
Convertible promissory notes – debt acquisition		100,000			100,000
Promissory notes - principal		300,000			–
Promissory notes – unamortized debt discount		(73,547	)		–
Settled and restructured notes payable:
Convertible promissory notes – debt acquisition		95,000			100,000
Notes payable – original bridge		120,000			120,000
Notes payable – bridge loan #1		~~355~~230,000			355,000
Notes payable – bridge loan #2		~~175~~85,000			~~200~~175,000
Notes payable – bridge loan #3		250,000			250,000
Convertible promissory note – Asher/Goldenrise		–			55,000
Subtotal		1,006,453			1,050,000
Convertible promissory notes – service agreement		–			20,000
Less current portion		(1,006,453	)		(1,050,000	)
Subtotal		1,050,000			1,100,000
Less current portion		(1,050,000	)		(1,100,000	)
Long-term portion	$	–		$	–

~~Notes Payable Settlement Agreements~~33

During the fourth quarter of 2014 and the first quarter of 2015, we reached settlements with most of our noteholders to restructure their notes (“Settlement Agreements”). In the restructuring of the notes payable, which was one of our Company’s conditions for closing of the Sky Rover SPA, our noteholders agreed to a) forgo payment of nearly all of the interest which had been accrued but unpaid as of the dates of each settlement agreement, b) a new interest rate of 10% per annum, c) a new maturity date of August 1, 2015, and d) a Company option to convert into free-trading shares of our common stock at any time the common stock has a closing bid price per share of $1.00 or more for 20 consecutive trading days after the closing of the Sky Rover SPA. Certain noteholders also agreed to relinquish to Sky Rover shares of their common stock they received with their original notes, contingent upon the Sky Rover SPA closing which occurred on April 17, 2015. In addition, holders of the restructured convertible promissory notes also agreed to forgo any additional principal (over and above the original principal) payable under their notes. As a result of these settlements, we recorded gains on extinguishment of debt totaling $952,400 in 2014 and $35,403 in 2015.

Acquisition Note – Powerdyne

InThis obligation arose in connection with our acquisition of Powerdyne (see Note 3)~~, we are required to make the following remaining Installment Payments of $25,000 due January 1, 2016, and April 1, 2016~~. AsRemaining ~~collateral~~payments ~~for~~on ~~the~~this ~~timely~~note ~~payment~~were ofmade ~~the Installment Payments, we pledged and granted a security interest~~ in ~~the acquired membership interest of Powerdyne to the seller, until such time all Installment Payments have been made~~2016. ~~Subsequent to December 31, 2015, the remaining Installment Payments were made.~~

Promissory Notes

In the fourth quarter of 2016, we issued promissory notes to three individuals with face values totaling $300,000. The notes are to be repaid from proceeds from the sale of our inventory, with 50% of the proceeds payable on a pari passu basis to each note holder.

In lieu of a stated interest rate, each note contains the following bonus payment provisions:

For each $25,000 invested, the note holder receives 12,500 shares of restricted common stock of our Company.

For each $25,000 invested, the note holder receives a cash bonus of:

$5,000 if note is repaid between zero and 30 days

$10,000 if note is repaid between 31 and 60 days

$15,000 if note is repaid between 61 and 90 days

All principal and accrued but unpaid bonus payments are due 90 days from the date of each note. As of the date of this filing, no inventory has been sold and no payments have been made under the notes. As a result, the notes are in default.

The note holders were issued 150,000 shares of our common stock under these notes. We have valued the shares at $87,312, their relative fair market value on the issue date of each note (the date the share obligation arose) and recorded a debt discount for that amount. We are amortizing the debt discount over the 90-day length of the note and we recognized an interest expense of $13,765 in 2016 in connection therewith. The remaining discount of $73,547 will be amortized in the first quarter of 2017.

Settled and Restructured Notes Payable

During the fourth quarter of 2014 and the first quarter of 2015, we reached settlements (“Settlement Agreements”) with virtually all of our noteholders holding debt acquisition promissory notes and bridge notes (original through bridge #3). In the restructuring of the notes payable, our noteholders agreed to a) forgo payment of nearly all of the interest which had been accrued but unpaid as of the dates of each settlement agreement, b) a new interest rate of 10% per annum, c) a new maturity date of August 1, 2015, and d) a Company option to convert into free-trading shares of our common stock at any time the common stock has a closing bid price per share of $1.00 or more for 20 consecutive trading days after the closing of the Sky Rover SPA. Certain noteholders also agreed to relinquish to Sky Rover shares of their common stock they received with their original notes, contingent upon the Sky Rover SPA closing which occurred on April 17, 2015. In addition, holders of the restructured convertible promissory notes also agreed to forgo any additional principal (over and above the original principal) payable under their notes. These notes are no longer convertible at the option of the holder. As a result of these settlements, we recorded gains on extinguishment of debt totaling $35,403 in 2015.

Convertible Promissory Notes – Debt Acquisition

~~During~~These notes originated during the first quarter of 2013 ~~we entered into Debt Acquisition Agreements (“Debt Agreements”)~~ with ~~two parties affiliated with each other (the “Debt Funders”).~~ ~~Under~~original ~~the~~face ~~Debt~~values ~~Agreements, we issued convertible promissory notes~~ totaling $150,000~~, $50,000 of which was subsequently converted to equity~~. ~~Prior~~In to the ~~Settlement~~fourth ~~Agreements~~quarter ~~discussed above, the notes bore interest at 10% per annum and were repayable at two times the principal amount~~ of the notes. Repayment was to be made by conversion into shares of our common stock based on a 20-day volume weighted average price with the minimum conversion price based on a market valuation $10 million and the maximum is based on a market valuation of $20 million. The due date by which the Debt Funders were to convert the notes was December 31, 2013, but such conversion was never made. In December 2014, we entered into Settlement Agreements with the holders of these notes, with the same terms as described under the above caption Settled and Restructured Notes Payable. ~~Settlement~~During the ~~Agreements.~~years ~~Accordingly~~ended December 31, ~~these~~2016 ~~notes~~and ~~are~~2015, ~~no longer~~we ~~convertible~~repaid at$5,000 ~~the~~and ~~option~~$0, ofrespectively, ~~the~~on ~~holder~~these notes.

Note Payable – Original Bridge

These notes which originated in 2009 and 2010 had an original face value totaling $245,000. Prior to the Settlement Agreements discussed above, they bore interest from 10% to 12% per annum and were repayable from a pool of 10% of gross proceeds from the sales of certain F.I.T.T. energy drink products. In December 2013, a noteholder converted $75,000 of this debt to equity. In 2014, we facilitated a share purchase agreement between Greenome Development Group, Inc. (“Greenome”) and a significant shareholder. Per the ~~terms~~fourth ofquarter ~~the agreement, we were relieved~~ of ~~$50,000 in debt from the shareholder. No payments have been made to date on these notes. In December~~ 2014, we entered into Settlement Agreements with the holders of these notes, with the same terms as described under the above caption ~~Notes~~ ~~Payable~~Settled ~~Settlement~~and ~~Agreements~~Restructured Notes Payable.

3334

Note Payable – Bridge Loan #1

InThese ~~2010,~~notes wewhich ~~initiated~~originated anin ~~offering~~2010 ~~to issue up to $1.0 million of units of securities, each unit consisting of a 12% unsecured promissory note~~ and ~~0.083 shares of our common~~ ~~stock~~2011 ~~for~~had ~~every~~an ~~dollar~~original ~~invested. In connection with this offering, we issued notes with~~ face value totaling $580,000. ~~During~~In the ~~three-month~~ ~~periods~~fourth ~~ended~~quarter ~~December 31, 2013 and March 31, 2014, respectively, the noteholders converted $175,000 and $50,000 into shares~~ of common stock. The notes were repayable 12 months from the date of issue and repayment was to come from a pool of 10% of cash receipts from the sales of certain F.I.T.T. energy drink products. No payments have been made to date on these notes. In December 2014, we entered into Settlement Agreements with the holders of $345,000 face value of these notes, with the same terms as described under the above caption Settled and Restructured Notes Payable. ~~Settlement~~During ~~Agreements~~2016 and 2015, we repaid $125,000 and $0, respectively, on these notes.

Note Payable – Bridge Loan #2

InThese ~~November~~notes ~~2011,~~originated wein ~~initiated~~2012 ~~a Bridge Loan offering of up to $1.0 million of units of securities, each unit consisting of a 10% convertible promissory note (interest rate increasing to 18% upon an event of default)~~ and ~~5.5 shares of our common stock for every dollar invested with repayment to be made~~had at two times the principal amount of the notes. The notes matured at various dates, all of which were within twelve months of the respective date of issuance. In connection with this offering, we issued notes with principal amounts totaling $255,000 (repayment amounts totaling $510,000). The additional principal of $255,000 was accreted over the respective term of each of the notes. We also recorded an ~~initial~~original ~~discount~~face ~~on the notes of $11,275 based on the estimated fair market~~ value oftotaling ~~our common shares on the date of issuance. As of December 31, 2014, there was no remaining unamortized discount. During the three-month period ended December 31, 2013,~~ $80175,000 ~~in principal amounts ($160,000 in repayment amounts) were converted to equity~~. Prior to the Settlement Agreements discussed above, in the event we filed a registration statement with the SEC and it was declared effective, we had the option to repay the original principal plus accrued interest in shares of its common stock calculated at the offering price within the registration. No payments have been made to date on these notes payable. We entered into Settlement Agreements in the fourth quarter of 2014 with holders of $150,000 face value of these notes, and in the first quarter of 2015 with holders of $25,000 face value of these notes, all with the same terms as described under the above caption Settled and Restructured Notes Payable. ~~Settlement~~During 2016 and 2015, we repaid $90,000 ~~Agreements~~and $0, respectively, on these notes.

Note Payable – Bridge Loan #3

InThese ~~December~~notes ~~2012,~~originated we initiated a Bridge Loan offering of up to $1.0 million of units of securities, each unit consisting of a 10% convertible promissory note (interest rate increasing to 18% upon an event of default). During the second quarter of 2013, we issued a note with face value totaling $250,000 in ~~connection with the offering and received proceeds of $225,000. We recorded an initial discount of $25,000 on this note which was amortized through June 30,~~ 2013~~, the effective maturity date of the note~~. The additional principal of $250,000 was accreted through the effective maturity date of June 30, 2013. Prior to the Settlement Agreements discussed above, the note was repayable at two times the principal amount of the note (repayment amount of $500,000) and matured June 30, 2013. Our Company had the option to repay the note in cash, shares of common stock of the merged entity, or a combination of cash and shares of common stock. Any portion of payment made in shares of our common stock was to be valued at the 20-day volume weighted adjusted market price of the stock of the merged entity. No payments have been made to date on these notes payable. In the fourth quarter of 2014, we entered into Settlement Agreements with the holder of these notes, with the same terms as described under the above caption Settled and Restructured Notes Payable ~~Settlement Agreements~~, with the exception that the modified note does not contain a conversion option.

~~Convertible Promissory Note – Asher/Goldenrise~~11. Related Parties

OnDuring ~~January 6~~2016, ~~2014,~~ we ~~issued~~made anet ~~convertible promissory~~advances ~~note~~ to ~~Asher~~Great Coin ~~Enterprises, Inc. (“Asher”)~~ in the amount of $421,~~500.~~494,002, ~~The~~mainly ~~note~~for ~~bore~~the ~~interest~~purpose atof 8%their ~~per~~development ~~annum and~~of ~~matured~~the onGX ~~October~~Coin 8,trading ~~2014.~~platform ~~Any~~which ~~amount~~could ofbe ~~principal~~used by orour ~~interest~~direct-selling ~~which~~members ~~was~~as ~~not~~part ~~paid~~of byour ~~the~~reward ~~maturity~~program. ~~date~~In ~~would~~addition, ~~bear~~our ~~interest at~~former ~~22%~~CEO, ~~per~~Mr. ~~annum~~Ning ~~from~~Liu, ~~the~~became ~~maturity~~responsible ~~date.~~for credit ~~The~~card ~~note~~charges ~~was~~totaling ~~convertible~~$24,298 ~~into~~which ~~shares~~were ofunrelated to our ~~common~~business ~~stock~~and ~~beginning~~unauthorized. ~~180~~Because ~~days~~of ~~from~~ the ~~date~~legal difficulties ofencountered by Mr. Liu in the ~~note~~PRC atdiscussed ain ~~conversion~~Note ~~price~~1, ofit ~~58%~~has ofbecome ~~the~~extremely ~~market~~difficult ~~price~~for ofGreat ~~the~~Coin ~~common~~to ~~stock.~~raise ~~The~~capital ~~note~~needed to ~~included~~repay athese ~~ratchet~~advances. ~~provision~~In addition, ~~which adjusted~~ the ~~conversion~~reduced ~~price~~activity inon the ~~event~~trading ofplatform, arelated ~~capital~~to ~~raise~~the atsuspension aof ~~lower~~our ~~amount~~direct ~~per~~selling program ~~share~~in ~~than~~ the ~~conversion~~fourth ~~price.~~quarter, Wereduces ~~recorded an~~the ~~initial~~ability ~~discount~~for ofGreat ~~$2,500~~Coin ~~which~~to ~~was~~generate ~~through~~revenue ~~October~~from 8,transactional ~~2014,~~activity. ~~the~~As ~~maturity~~a ~~date~~result, while ~~and~~we ~~accelerated~~will ~~the~~continue ~~amortization~~to aspursue acollection ~~result of~~from the ~~note~~applicable ~~assumption~~parties, byduring ~~Goldenrise~~the ~~Development,~~fourth ~~Inc.~~quarter ~~(“Goldenrise”)~~of ~~described~~2016, ~~below.~~we ~~During~~reserved $1,518,300 representing the ~~years~~total ~~ended~~of ~~December 31,~~these ~~2015~~advances ~~and~~as ~~2014,~~it $0is ~~and~~unclear ~~$2,500,~~whether ~~respectively~~any ~~was~~of ~~amortized~~these toadvances ~~expense~~will be collectable.

OnAdvances ~~July~~from ~~15,~~related ~~2014,~~party weconsist ~~entered into an Assignment Agreement with Asher and Goldenrise under which Asher agreed to assign the note to Goldenrise for consideration~~ of ~~$55,000. Also~~net ~~effective~~advances onmade ~~July~~by ~~15,~~our ~~2014 and subsequent to the assignment~~CEO, weMichael ~~amended the note to revise the principal amount to $55,000 and to modify the conversion feature so that the conversion price cannot be lower than $0~~Dunn.15 per share. The amendment also eliminated the note’s ratchet provision. As such, derivative accounting does not apply under the new terms. In connection with this transaction, we recorded a loss on extinguishment of debt of $9,948.

Convertible Promissory Notes – Service Agreement

During the first quarter of 2013, we became obligated to issue convertible promissory notes totaling $20,000 to a company under a Service Agreement. The notes bear no interest and were to be repayable through a conversion into shares of our common stock. We have now determined that the service provider has not performed any services under the agreement and allowed for adequate time for the service provider to make good on their service obligation. Therefore, management believes the obligation is invalid. As a result, in 2015 we eliminated the note and recorded a gain on extinguishment of debt of $20,000.

Debt Conversions

In April 2015, Goldenrise converted its convertible promissory note into 123,268 shares of common stock in accordance with the terms of the note.

11. Advances from Related Parties

Advances from related parties consist of the following at December 31:

	2015		2014
Advances from our CFO (former CEO)	$	89,359	$	142,203
Advances from Shareholder		–		15,000
	$	89,359	$	157,203

12. Commitments and Contingencies

On October 16, 2015, we entered into a lease agreement for 5,824 square feet of office space in Irvine, California. The lease has a minimum term of 60 months ~~with~~and ~~monthly~~requires ~~rents~~the following ~~escalating~~minimum ~~from~~annual payments, excluding property taxes and other common area costs: months 1 through 12 - $176,112; months 13 through 24 - $14183,~~676~~804; inmonths ~~year~~25 ~~one~~through to36 - $17192,~~472~~192; inmonths ~~year~~37 ~~five.~~through 48 - $200,580; and months 49 through 60 - $209,664. Tenant improvements made by the landlord were completed at the end of January 2016, at which time we moved into the space and our lease commenced. Accordingly, the annual payments as just described also substantially reflect the five-year payout schedule through 2020. Annual rent expense for the years ended December 31, ~~2015~~2016 and ~~2014~~ 2015 was $33150,~~335~~907 and $2233,~~109~~335, respectively.

~~Future~~Due ~~minimum~~to ~~lease~~the ~~obligations~~escalating rent we have recorded a deferred rent liability of $16,358 as of December 31, ~~2015~~2016 ~~are~~which asequates to the accumulated difference between the amount paid each month and the expense ~~follows:~~on a straight-line basis over the lease term.

2016	$	161,436
2017		183,163
2018		191,493
2019		199,881
2020		208,907
Thereafter		17,472
Total minimum lease obligations	$	962,352

13. Capital Stock

S-1 Registration Statement

On May 8, 2015, we filed a Form S-1 Registration Statement with the SEC for the initial registration of 10 million shares of our common stock at $3.50 per share, as amended on June 8, 2016, and amended further on June 19, 2016 (collectively the “S-1”). The S-1 was declared effective by the SEC on July 6, 2015.

The Company has filed and continues to file Post-Effective Amendments to keep the S-1 current and effective. However, as of the date of this filing, the S-1 is currently ineffective and under review by the SEC.

The summary below details the Post-Effective Amendments we have filed with the SEC as of the date of this filing:

On October 8, 2015, we submitted Post-Effective Amendment No. 1 to the S-1 incorporating new information resulting from certain transactions in connection with GX-Life, and the resignation of our former CEO, Lei Pei. The Post-Effective Amendment No. 1 was declared effective by the SEC on October 19, 2015.

On December 2, 2015, we submitted Post-Effective Amendment No. 2 to the S-1 incorporating certain information contained in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015, that was filed with the SEC on November 17, 2015. The Post-Effective Amendment No. 2 was declared effective by the SEC on December 22, 2015.

On May 4, 2016, we submitted Post-Effective Amendment No. 3 to the S-1 incorporating certain information contained in our Annual Report on Form 10-K for the year ended December 31, 2015, that was filed with the SEC on April 13, 2016, information contained in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016, that was filed with the SEC on May 16, 2016, and certain changes in circumstances involving the development and utilization of GX Coin in GX-Life’s Direct Selling Program. We disclosed in this Post-Effective Amendment that we had sold 1,013,500 shares of our common stock under this prospectus. This was due to the fact that subsequent to March 31, 2016, and while the S-1 was still effective, we had received written and verbal commitments to purchase 1,000,000 shares under the S-1 for a total of US$3,500,000. However, certain investors either did not (i) transmit their respective funds to purchase their shares, or (ii) provide the appropriate written documentation to the Company prior to the S-1 becoming ineffective. As a result, we were only able to appropriately document the sale of 759,453 shares under the S-1 for a total of US$2,658,086, and sold an additional 48,104 shares to certain individuals in exchange for noncash consideration.

On July 22, 2016, we submitted Amendment No. 1 to Post-Effective Amendment No. 3 with the SEC to maintain the registration of 9,192,443 shares of our Common Stock. The S-1 is currently under review and we will not sell any shares under the S-1 until it is deemed effective by the SEC. Reference to the S-1 is not an offer to sell the securities described therein, and we are not soliciting an offer to buy the securities in any state where the offer or sale is not permitted.

S-8 Registration Statements

On July 29, 2016, we filed a Form S-8 Registration Statement (“S-8”) with the SEC to register 32,500 shares of our common stock at $1.69 per share. On October 5, 2016, we filed an S-8 with the SEC to register 33,500 shares of our common stock at $1.01 per share. The S-8’s were deemed effective as of the filing date pursuant to Rule 462 of the Securities Act.

Preferred Stock

We have authorized the issuance of a total of 20,000,000 shares of our preferred stock, each share having a par value of $0.001.

Common Stock

We have authorized the issuance of 150,000,000 shares of our common stock, each share having a par value of $0.001. ~~Prior~~As todiscussed under the ~~closing~~above ofcaption ~~the~~S-1 ~~SPA~~Registration ~~with~~Statement, during ~~Sky~~2016 ~~Rover~~we sold 759,453 ~~Mr.~~shares ~~Lei~~for ~~Pei purchased~~net 6proceeds of $2,~~000~~658,~~000~~086. ~~newly-issued~~In ~~shares~~addition, ofduring ~~our~~2016 ~~common~~we ~~stock~~sold ~~for $3~~25,000~~,000~~ inshares ~~cash~~of inour arestricted common ~~separate~~stock ~~transaction~~to ~~that~~an ~~closed~~investor onfor ~~March 30,~~net ~~2015~~proceeds of $25,000.

Effective April 17, 2015 in connection with the closing of the Sky Rover SPA, Sky Rover's designees received 33,240,000 shares of our common stock of which 3,371,351 were newly issued and 29,868,649 were conveyed by certain affiliated and unaffiliated existing shareholders to complete the transaction. All shares were considered to be part of the $400,000 acquisition price to acquire the stock per the terms described in Note 3. Prior to the closing of the Sky Rover SPA, Mr. Lei Pei purchased 6,000,000 newly-issued shares of our common stock for $3,000,000 in cash in a separate transaction that closed on March 30, 2015.

Common Stock Issued for Services

~~During~~Employee 2015, we issued 250,000 shares of our common stock for consulting services related to marketing. The shares were valued at $65,000 which was our determination of the fair market value of the shares. We recorded selling and marketing expense of $65,000 in connection with the share issuances.Services

During ~~2014~~2016, we issued 5097,000 shares of our common stock to certain of our employees for services relating to ~~investor~~conditions ~~relations~~of ~~and~~their ~~the~~employment. ~~development~~66,000 of ~~shareholder~~these ~~awareness~~shares were issued under Form S-8 as described above and 31,000 of these shares were issued under our S-1 Registration Statement. The shares were valued at $12237,~~500~~077 ~~which~~based ~~was~~on our ~~determination of~~Company’s ~~the~~stock ~~fair~~price ~~market~~and ~~value~~we ~~of the shares. We~~ recorded general and administrative expense of ~~$12,500~~that amount in connection with the share issuance. No shares were issued for employee services in 2015.

Non-Employee Services

During 2016, we issued 203,000 shares of our common stock for consulting services rendered. 3,000 of these shares were issued under our S-1 Registration Statement and 200,000 of these shares were restricted. We recorded general and administrative expense of $179,570 in connection with the share issuances based on the fair market value (quoted market price) of our common stock on the dates of issuance.

During 2015, we issued 250,000 shares of our common stock for consulting services related to marketing. The shares were valued at $65,000 based on the fair market value (quoted market price) of our common stock on the dates of issuance. We recorded selling and marketing expense of $65,000 in connection with the share issuances.

Common Stock Issued to Extinguish Debt

During ~~2015~~2016, we entered into a settlement ~~agreements~~agreement with ~~two~~a ~~vendors~~vendor under which we issued 2514,~~000~~104 shares of our common stock to settle $49,~~189~~364 of outstanding amounts due. WeThe ~~recorded~~shares awere ~~gain~~issued ofunder onour ~~extinguishment~~S-1 ofRegistration ~~debt~~Statement. ofNo ~~$2,089~~gain onor ~~these~~loss ~~settlements~~was recorded with respect to this settlement.

InDuring ~~2014~~2015, awe ~~creditor~~entered ~~holding~~into ~~notes~~settlement ~~payable~~ agreements with ~~repayment~~two ~~amounts totaling~~vendors ~~$55,000~~under ~~($50,000~~which inwe ~~Notes~~issued ~~Payable- Bridge Loan #1 and $5~~25,000 ~~in Notes Payable – Other) agreed to settle the obligations by accepting 115,637~~ shares of our common stock. ~~Prior~~ to ~~the~~settle ~~settlement~~$49,189 ~~these~~of ~~notes~~outstanding ~~contained~~amounts nodue. ~~stated~~We ~~conversion features.~~recorded Wea ~~valued~~gain ~~the~~of ~~shares~~on atextinguishment ~~their~~of ~~fair~~debt ~~market~~of ~~value~~$2,089 on ~~the~~these ~~date~~settlements ofbased ~~settlement~~on ~~and during~~ the ~~year~~fair ~~ended~~market ~~December~~value ~~31,~~(quoted ~~2014,~~market weprice) ~~recorded~~of our acommon ~~loss~~stock on ~~extinguishment~~the date of ~~debt totaling $33,594 in connection with this transaction~~issuance.

Also in 2014, we issued 274,761 shares of our common stock to our legal counsel to settle the $274,761 accounts payable balance owed to them. We valued the shares at their fair market value on the date of settlement and recorded a gain on extinguishment of debt of $142,876 in connection with this transaction.

Contributed Capital

As discussed in Note 9, during 2016 our former CEO repaid certain member deposits totaling $250,000 which we have we have accounted for as contributed capital.

During 2015, our former Chief Executive Officer, Michael Dunn and our former Controller forgave accrued compensation due to each of them. In connection with these transactions, we recorded contributed capital of $1,673,774.

Also in 2015, we recorded the following transactions as contributed capital:

Payments made by a former CEO, Lei Pei, for Powerdyne acquisition	$	175,000
Advances in connection with Sky Rover SPA for expenses incurred due to late closing of the Sky Rover SPA		139,885
Net receipts in connection with all outstanding issues with Mr. Lei Pei		40,540
	$	355,425

Warrants and Stock Options

During the years ended December 31, ~~2015~~2016 and ~~2014~~ 2015, there were no warrants or stock options outstanding and there was no expense related to warrants or stock options.

On December 30, 2015, we elected to withdraw and terminate our Option Plan for employees, officers, and consultants of our Company. At the time of cancellation, there were no options outstanding and 13,889 shares were remaining for future issuance. We will re-evaluate the implementation of an option plan in the future at the Board of Director’s discretion.

14. Income Taxes

Reconciliations of the U.S. federal statutory rate to the actual tax rate are as follows for the years ended December 31:

	2015		2014
	2016		2015
Federal tax at statutory rate		34.0%		34.0%
Permanent differences:
State income taxes, net of federal benefit		5.8%		5.8%
Gain/loss on extinguishment of debt		4.6%		-191.2%
Stock issued for services		-3.0%		–
Amortization of debt discount and accretion of debt		–		0.5%
Gain/loss on extinguishment of debt		-0.1%		4.6%
Non-deductible entertainment		-0.1%		0.3%
Amortization of debt discount and accretion of debt		-0.1%		–
Non-deductible entertainment		–		-0.1%
Temporary differences:
Accrued liabilities and other		~~-0.1%~~–		-0.41%
Change in valuation allowance		-4436.36%		~~150~~-44.53%
Total provision		-0.10%		-0.41%

The major components of the deferred taxes are as follows at December 31:

	Asset (Liability)
	2015			2014
	2016			2015
Current:
Reserves and accruals	$	51501,~~290~~907		$	~~309~~51,~~724~~290
Noncurrent:
Net operating losses		12,~~166~~770,~~436~~239			~~504~~1,~~644~~166,436
Valuation allowance		(13,~~217~~272,~~726~~146	)		(~~814~~1,~~368~~217,726	)
Net deferred tax asset	$	–		$	–

Based on federal tax returns filed or to be filed through December 31, ~~2015~~ 2016, we had available approximately $288,~~410~~322,000 in U.S. tax net operating loss carryforwards, pursuant to the Tax Reform Act of 1986, which assesses the utilization of a Company’s net operating loss carryforwards resulting from retaining continuity of its business operations and changes within its ownership structure. Net operating loss carryforwards expire in 20 years for federal income tax reporting purposes. For Federal income tax purposes, the net operating losses begin to expire in 2026. State net operating loss carryforwards through December 31, ~~2015~~2016 are approximately $268,~~062~~197,000 and begin to expire in 2030. We have ~~begun~~relied on the issuance of common stock to ~~expire~~fund certain operating expenses.

36With the finalization of our merger with FITT, we experienced a change in ownership as defined in Section 382 of the Internal Revenue Code. As a result, our net operating loss carryforwards for federal income tax reporting became significantly limited based on the fair value of our Company on the date of change in ownership. Such change is expected to provide benefit to us only upon the attainment of profitability.

With the finalization of our merger with FITT, we experienced a change in ownership as defined in Section 382 of the Internal Revenue Code. As a result, our net operating loss carryforwards for federal income tax reporting will be significantly limited based on the fair value of our Company on the date of change in ownership. Such change is expected to provide benefit to us only upon the attainment of profitability.

Due to the Sky Rover and GX-Life transactions (Note 1) there has been a significant change in ownership. A change in ownership requires management to compute the annual limitation under Section 382 of the Internal Revenue Code. The amount of benefits we may receive from the operating loss carry forwards for income tax purposes is further dependent, in part, upon the tax laws in effect, our future earnings, and other future events, the effects of which cannot be determined.

During the years ended December 31, 2016 ~~2015~~ and ~~2014~~2015, our valuation allowance increased by $~~403~~2,~~358~~054,420 and $~~288~~403,~~075~~358, respectively.

The United States Federal return years 2013 ~~2011~~ through ~~2014~~2016 are still subject to tax examination by the United States Internal Revenue Service, however, we do not currently have any ongoing tax examinations. We are subject to examination by the California Franchise Tax Board for the years ~~2010~~2013 through 2016 ~~2013~~ and currently do not have any ongoing tax examinations.

15. ~~Gain (Loss) on Extinguishment of Debt~~ Agreements

Gain (loss) on extinguishment of debts for the years ended December 31:

	2015		2014
Notes payable:
Settlement agreements – with common stock (Note 13)	$	–	$	(33,594	)
Settlement agreements – without common stock (Note 10)		35,403		952,400
Write-off notes payable (Note 10)		20,000		–
Accounts payable and accrued expenses:
Settlement agreements – with common stock (Note 13)		2,089		142,876
Settlement agreements – without common stock		105,012		–
Write-off accounts payable and accrued expenses		102,319		–
Past-due Federal payroll taxes (Note 8)		54,000		–
Forgiveness of advances from former related party		15,000		–
Assignment of Asher note payable (Note 10)		–		(9,948	)
	$	333,823	$	1,051,734

In 2015, prior to the closing of the Sky Rover SPA, we reached settlement agreements with numerous creditors holding $134,762 in accounts payable. In connection with the settlement agreements, we recorded gains on the extinguishment of debt in the amount of $105,012. In addition, we eliminated $102,319 in accounts payable and accrued expenses for which the statute of limitations for legal claims to be made for collections has passed.

16. Agreements

Greenome Share Exchange Agreement

On May 6, 2014, we entered into a Share Exchange Agreement (“SEA”) with Greenome and agreed to sell to Greenome 80% of our outstanding common stock for a purchase price of $400,000. The SEA required that both Greenome and our Company meet certain conditions in order for a closing to take place. The SEA also required Greenome to make certain advance payments to us prior to the closing which were refundable under certain circumstances. Both parties eventually became aware that the closing conditions would be difficult to meet, and on September 19, 2014, we entered into a Financing Agreement with Greenome which also terminated the SEA.

On May 30, 2014, on behalf of Greenome, we entered into a stock purchase transaction with a significant shareholder for the purchase of 9,669,575 shares of our common stock. Per the agreement, we were to receive funds as indicated above from Greenome, and remit $125,000 of those funds to the shareholder in several tranches. The SEA was terminated as described above; however, the terms of the agreement were effectively transferred from Greenome to Sky Rover per the Sky Rover SPA (Note 3). Final payment to the shareholder was made in February 2015 and the shares of common stock were transferred in accordance with the agreements.

Greenome Financing Agreement

On September 19, 2014, we entered into a financing agreement with Greenome, whereby we agreed to raise up to $3.0 million through a private placement memorandum then loan these funds to a subsidiary of Greenome under a promissory note bearing interest at the rate of 10% per annum. The note would mature twelve months from its inception and be secured by the assets of Greenome. No funds have been raised to date.

In connection with the closing of the Sky Rover SPA, Greenome received 2,000,000 of our common shares as directed by Sky Rover and all obligations between our Company and Greenome, outside any future financing with Greenome, were deemed satisfied.

Mo Feng Yi Consulting Agreement

On November 24, 2015, we entered into a Consulting Agreement with Mo Feng Yi (“Consultant”), an individual with extensive contacts and business relationships in Asia. Under the agreement, which has a term of ~~six (~~6) months, Consultant agreed to provide various business and market development services for our direct-selling business. The agreement required us to pay Consultant $200,000 in 2015 in two equal installments for services provided.

On February 23, 2016, we amended the agreement to provide for an additional payment of $100,000 in February 2016 for continued service.

~~Alicia Xie Geiser Consulting Agreement~~38

~~On December 1, 2015 we entered into a Consulting Agreement with~~ Alicia Xie Geiser ~~(“Consultant”),~~Consulting an individual with extensive contacts and business relationships in Asia. Under the agreement, which has a term of six (6) months, Consultant agreed to provide various business and market development services for our direct-selling business. The agreement requires us to pay Consultant $10,000 per month. During 2015, we recorded a general and administrative expense of $10,000 in connection with this agreement.Agreements

17On December 1, 2015, we entered into a Consulting Agreement with Alicia Xie Geiser (“Consultant”), an individual with extensive contacts and business relationships in Asia. Under the agreement, which has a term of 6 months, Consultant agreed to provide various business and market development services ~~Subsequent~~for ~~Events~~our direct-selling business. The agreement requires us to pay Consultant $10,000 per month. During 2016 and 2015, we recorded general and administrative expenses of $40,000 and $10,000, respectively, in connection with this agreement.

On September 21, 2016, we entered into another Consulting Agreement with Consultant under which Consultant agreed to provide advice and assistance with respect to our capital market positioning. Consultant also agreed to help us broaden the market support for our securities and introduce us to prospective investors. Under the agreement, which had a one-month term, we agreed to issue Consultant 25,000 shares of our restricted common stock which we valued at $29,750, the fair market value at the date of issuance. In 2016, we recorded a general and administrative expense of the same amount in connection with this agreement.

Private Consulting Group Consulting Agreement

On February 26, 2016, we entered into a Consulting Agreement with Private Consulting Group (“Consultant”) under which Consultant agreed to provide business and financial ~~consulting~~ consulting services including advice and assistance with our capital market positioning and identifying prospective institutional ~~purchasers~~ purchasers for our equity securities. The agreement has a term of ~~seven (~~7) months and requires that we pay Consultant $10,000 per month and issue Consultant 50,000 restricted shares of our common stock. ~~During~~Because ~~2016~~of Consultant’s inability to completely perform the services, we ~~will~~paid ~~value~~only ~~the~~$30,000 and issued only 25,000 shares. ~~based~~The onshares were valued at $65,250, their fair market value on the date of ~~issue~~issuance. ~~and~~In ~~record~~connection with this agreement, we recorded a general and administrative expense in ~~the~~2016 ~~appropriate~~totaling ~~amount~~$95,250.

iMatrix Software, Inc. Consulting Agreement

On February 17, 2016, we entered into a Consulting Agreement with iMatrix Software, Inc. (“Consultant”) under which Consultant agreed to provide services to assist in developing and expanding our direct-selling business. The agreement has a minimum term of 3 months and requires that we pay Consultant $18,000 per month and issue Consultant 3,000 registered and free-trading shares of our common stock. The shares were valued at $8,070, their fair market value on the date of issuance. In connection with this agreement, we recorded a general and administrative expense in 2016 totaling $116,070.

Mitchell Morrison Consulting Agreement

On April 1, 2016, we entered into a Consulting Agreement with Mitchell Morrison (“Consultant”) under which Consultant agreed to provide business and financial consulting services including advice and assistance with our capital market positioning and identifying prospective institutional purchasers for our equity securities. The agreement has no stated term, is cancellable by either party on 30 days’ notice, and requires that we pay Consultant $15,000 on execution of the agreement and $10,000 per month. During 2016, we recorded a general and administrative expense totaling $15,000 in connection with this agreement as it was cancelled shortly after its inception.

~~Employee~~Juan ~~Shares~~Lopez Consulting Agreement

~~During~~On ~~the~~December ~~three~~8, ~~months~~2016, ~~ended~~we ~~March~~entered ~~31,~~into ~~2016,~~a Consulting ~~four~~Agreement with Juan Lopez (“Consultant”) under which Consultant agreed to assist us in developing a marketing plan for the promotion and sale of our ~~employees~~products ~~earned~~outside the direct-selling area. The agreement has a ~~total~~term of 314 months and requires that we issue Consultant 150,000 ofrestricted ~~our~~shares, ~~free-trading~~all ~~common~~of ~~shares~~which inwere ~~accordance~~vested ~~with~~as ~~employment~~of ~~arrangements~~the ~~they have~~date ~~with~~of ~~our~~the ~~Company~~agreement. We ~~will~~have ~~value~~valued the shares atbased ~~the~~on their fair market ~~values~~value ~~over~~on the ~~period~~date of ~~time~~issue ~~they~~and ~~were~~recorded ~~earned~~a selling and ~~will~~marketing ~~charge our~~expense ~~results~~in ofthe ~~operations~~amount ~~accordingly~~of $76,500.

~~Other~~16. Subsequent ~~Information~~Events

~~Subsequent~~Promissory to December 31, 2015, we arranged for the sale of 1,000,000 shares under the S-1 for a total of $3,500,000. In that regard, we have received $999,975 to date and we are in the process of finalizing the remaining paperwork and funding with respect to the sale. In addition, during the three months ended March 31, 2016, we have received approximately $1,770,000 from new members enrolled in our GX-Life direct-selling membership program. Note

38On January 27, 2016, we issued a promissory note to an individual with a face value of $50,000. The note has the same terms as the notes described in Note 10 under the caption Promissory Notes including the issuance of 25,000 shares of our restricted common stock.

Stock Issuance Cancellation Agreement

Due to Mr. Liu’s legal challenges in the PRC, as described in Note 1, the following actions were taken.

On March 20, 2017, we entered into a Stock Issuance Cancellation Agreement with, Master Power Holdings Group and Big Name Group Co. Ltd., a British Virgin Islands corporation controlled by Mr. Ning (Sam) Liu (“Mr. Liu”), the Company’s former Chief Executive Officer, (collectively the “Shareholders”). Pursuant to the Agreement, the Shareholders agreed to cancel and return to treasury an aggregate 8,349,906 shares of common stock (representing 17.12% of the current issued and outstanding common stock) as consideration for the significant hardship suffered by the Company as a result of Mr. Liu’s legal challenges.

Upon the closing of the Agreement, which took place on March 20 2017 (the “Closing”), the Shareholders surrendered their stock certificates representing an aggregate 8,349,906 shares of common stock with all necessary documentation to the Company’s transfer agent for cancellation.

Additionally, Mr. Liu entered into an agreement to cancel his share ownership in Great Coin, a company that provides the platform and cryptocurrency (GX-COIN) used by our wholly-owned subsidiary, GX-Life Global, Inc. (“GX-Life”). Prior to the cancellation, Mr. Liu owned 50.0% of Great Coin and Michael Dunn, our Chief Executive Officer and member of our Board of Directors, owned the other 50.0% of Great Coin. After the cancellation, Mr. Dunn owns 100% of Great Coin.

ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our President and Chief Financial Officer (the “Certifying Officer”) has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) as of the end of period covered by this report. Based upon such evaluation, the Certifying Officer concluded that our disclosure controls and procedures were effective as of December 31, ~~2015~~2016.

Management’s Report on Internal Control over Financial Reporting

Our management, including the Certifying Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that our receipt and expenditures are being made only in accordance with authorizations of management and our Board; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

All internal control systems, no matter how well designed, have inherent limitations. A system of internal control may become inadequate over time because of changes in conditions or deterioration in the degree of compliance with the policies or procedures. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Our management assessed the effectiveness of our internal control over financial reporting as December 31, ~~2015~~2016 using the criteria set forth by the Commission of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on this assessment, our management concluded that our internal control over financial reporting disclosure controls and procedures were effective as of December 31, ~~2015~~2016.

Changes in Internal Control and Financial Reporting

There have been no changes in our internal control over financial reporting in the fiscal year ended December 31, 2016, which were identified in connection with our management’s evaluation required by paragraph (d) of rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management's report in this annual report.

ITEM 9A(T) CONTROLS AND PROCEDURES

This Item is not applicable to us.

ITEM 9B OTHER INFORMATION

On October 21, 2016, Ning Liu resigned as the Company’s Chief Executive Officer, President, and Chairman of the Board. On August 17, 2015, the following individuals ~~resigned~~ resigned from their respective positions with our Company: Lei Pei, our former CEO, former CFO, and former Chairman; Junfei Ren, our former Secretary and former Director; and Xiang Ling Yun, a former Director. Concurrent with the resignations, Ning Liu, who was our President, was appointed to the positions of Chairman and CEO, and Michael R. Dunn, who was the Executive Vice President of Finance, was appointed to the positions of Chief Financial Officer, Chief Operating Officer, and Secretary and Treasurer.

3940

PART III

ITEM 10 DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Name	Age		Position(s) and Office(s)	~~Position(s) and Office(s)~~
Ning Liu		53		Current Chief Executive Officer, President, Chairman of the Board. Former Chief Operating Officer.
Michael R. Dunn	65		Current Chief Operating Officer, Chief Financial Officer, Secretary, Treasurer, Executive VP of Finance, Director. Former Chief Executive Officer.
Michael R. Dunn		64		Current Chief Operating Officer, Chief Financial Officer, Secretary, Treasurer, Director, Former Chief Executive Officer.

There are no family relationships among our Company’s directors and executive officers.

Directors

Number of Directors. Our board of directors currently consists of two individuals.

Director Qualifications. While the selection of directors is a complex and subjective process that requires consideration of many intangible factors, we believe that candidates should generally meet the following criteria:

●· Broad training, experience and a successful track record at senior policy-making levels in business, government, technology, accounting, law, consulting and/or administration; ●· The highest personal and professional ethics, integrity and values; ●· Commitment to representing the long-term interests of our Company and all of its shareholders; ●· An analytical and objective perspective, strength of character, and the mature judgment essential to effective decision-making; ●· Expertise that is useful to our Company and complementary to the background and experience of other Board members; and ●· Sufficient time to devote to Board activities and to enhance their knowledge of our business, operations, and industry.

The Board believes that our current directors meet these criteria above. In addition, as outlined below, the directors bring a strong and unique background and set of skills to the Board, giving the Board as a whole competence and experience in a wide variety of areas. We believe that the Board as a whole and our directors possess the necessary qualifications and skills to effectively advise management on strategy, monitor our performance, and serve our best interests and the best interests of our shareholders.

A brief description of the background and business experience of our Company’s management, executive officers, and directors is set forth below:

~~Ning~~Michael ~~Liu~~R. Dunn, our current ~~Chief~~ Executive ~~Officer,~~Vice President, ~~and Chairman~~ of ~~the~~Finance, ~~Board~~Chief ofFinancial ~~Directors~~Officer, ~~and former~~ Chief Operating Officer, ~~was~~Secretary ~~appointed~~and asTreasurer ~~President, Chief Operating Officer~~ and member of ~~the~~our Board of Directors ~~on April 17~~, ~~2015~~previously ~~and~~served ~~was~~as ~~subsequently appointed~~ Chief Executive Officer and Chairman onof ~~August~~our ~~17,~~Board ~~2015.~~of ~~Mr.~~Directors ~~Liu~~from ~~also~~May ~~resigned~~28, as2008 ~~Chief~~until ~~Operating~~April ~~Officer (replaced by Mr. Dunn) on August~~ 17, ~~2015 upon~~ ~~appointment as CEO~~2015. ~~Mr.~~He ~~Liu,~~joined ~~who~~our ~~is originally from Fuzhou~~Company, ~~Fujian,~~which ~~China,~~was isconsidered a ~~businessman, investor and philanthropist. Mr. Liu is the founder and serves as the President of American International Cultural Exchange Foundation (AICEF) in Los Angeles, California. AICEF is a non~~turn-~~profit~~around ~~organization that promotes cultural interaction between China and the United States. AICEF has successfully hosted more than 100 large-scale theatrical performance and events~~project, including Spirit of Chang An, Yulan-Love of the World, and The Terracotta Nutcracker. Mr. Liu has also served as President of a health products manufacturer with annual sales of over $80 million and as a senior manager of a trading company with annual sales over $300 million, both doing business in ~~the~~order ~~United States and China. In addition, from 2005~~ to ~~present,~~work ~~Mr.~~on ~~Liu has assisted Chinese domestic enterprises in~~ the ~~development~~reduction of ~~their~~significant ~~business~~Company ~~in the United States. Mr. Liu~~debt, ~~who~~obtain ~~has~~major acapital ~~Master’s degree from Beijing University~~infusion, ~~has~~provide ~~been active in founding, organizing and managing~~ a ~~number~~rationalization of ~~foreign~~our ~~investment~~product ~~projects to China. He has served as a senior executive in five different public companies in the U.S.~~line, and ~~three~~establish ina ~~Hong~~more ~~Kong.~~effective Heproduct ~~has extensive experience in international trade, finance, venture capital, private placement and cultural activities~~distribution.

Michael R. Dunn, our current Chief Financial Officer, Chief Operating Officer, Secretary and Treasurer and member of our Board of Directors, previously served as Chief Executive Officer and Chairman of our Board of Directors from May 28, 2008 until April 17, 2015. He joined our Company, which was considered a turn-around project, in order to work on the reduction of significant Company debt, obtain major capital infusion, provide a rationalization of our product line, and establish a more effective product distribution.

From December 1995 through 2010, Mr. Dunn was the Chief Executive Officer of Bankers Integration Group, Inc., an e-commerce company serving the automotive finance and insurance industry. In mid-1995 through 2006, Mr. Dunn started a company that generated a $60 million auto portfolio that was sold to a subsidiary of General Motors. Mr. Dunn interfaced with the top CEOs of automotive companies, including Harold Poling, the former CEO and Chairman of Ford Motor Company, and Bob Eaton, the former Chairman and CEO of Daimler Chrysler. Mr. Dunn secured $22.2 million in equity financing for Bankers Integration Group, plus an additional $20.8 million and $1.9 million in debt and lease financing, respectively. Bankers Integration Group, Inc. filed for Chapter 11 bankruptcy protection in October of 2007, and Mr. Dunn acted as the Trustee and coordinated the sale of the assets. The case was closed on November 17, 2010. Mr. Dunn also served as Chairman and Chief Executive Officer of Mountaineer Gaming, a gaming and entertainment company, where he coordinated the design and implementation of a $10 million renovation of the racetrack, and put into service over 700 new video lottery machines. The park had over 450 employees while Mr. Dunn was Chairman and CEO of the public company. He was instrumental in raising investor capital of approximately $17 million, plus an additional $17 million in construction loan and equipment lease financing. Mr. Dunn has vast experience as being the owner, manager, and director of various businesses, both large and small. Mr. Dunn attended La Crosse State University, Wisconsin, in business and has extensive training in business management and leadership.

Legal Proceedings

~~None~~On ofAugust 30, 2016, we reported on Form 8-K that our ~~directors~~former Chief Executive Officer (“CEO”), ~~executive~~President, ~~officers~~and Chairman of the Board of Directors, Ning Liu, was detained ~~promoters~~in the People’s Republic of China (“PRC”). On October 21, 2016, because of his ongoing legal challenges in the PRC, Mr. Liu resigned from all his positions in our Company. Mr. Liu continues to be detained in the PRC. The charges against Mr. Liu are personal to him and our Company is in no way named as a defendant or ~~control~~subject ~~persons~~to ~~has~~the charges. We have been ~~involved~~informed by Mr. Liu’s attorney in ~~any~~the PRC that, on March 2, 2017, he was convicted in Hunan province for violations of the ~~following~~PRC’s ~~events~~multi-level marketing ~~during~~regulations ~~the~~and ~~past~~sentenced ~~ten~~to 10 years: in prison. We have likewise been informed by Mr. Liu’s attorney that he has an appeal hearing scheduled in Hunan Province in the near future and, if he is unsuccessful in that hearing, he can appeal to a national court in Beijing, China.

Other than the foregoing, none of our directors, executive officers, promoters or control persons has been involved in any of the following events during the past ten years:

	·	any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

	·	any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

	·	being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

	·	being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934 requires our directors, officers and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities. Officers, directors and greater than 10% shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.

We believe that the following filings were either made late or not filed pursuant to Section 16(a) of the Exchange Act:

· Our ~~current~~former CEO, Mr. Liu, indirectly owns 1,235,906 shares of our common stock. Although he acquired these shares on April 17, 2015, a Form 3 was not filed until October 8, 2015.

A 10% shareholder owns 7,114,000 shares of our common stock. This shareholder originally acquired 9,120,000 shares of our common stock back on April 17, 2015, subsequently transferred 1,001,000 of the 9,120,000 shares on May 11, 2015, and transferred another 1,005,000 shares on July 30, 2015. A form 3 reflecting these transactions was filed on October 8, 2015.

Our current CFO, Mr. Dunn, acquired 9,347,047 shares of our common stock on October 2, 2015. However, a Form 4 reflecting this transaction was filed on October 8, 2015.

A 10% shareholder acquired 9,647,047 shares of our common stock on October 2, 2015. However, a Form 4 reflecting this transaction was filed on October 8, 2015.

On April 17, 2015, Junfei Ren was appointed as Secretary and a member of the Board, but no Form 3 was filed on her behalf. However, we believe that Ms. Ren did not own any shares at the time of her appointment, and she has resigned from her positions back on August 17, 2015.

On April 17, 2015, Xiang Ling Yun was appointed as a member of the Board, but no Form 3 was filed on her behalf. However, we believe that Ms. Yun did not own any shares at the time of her appointment, and she has resigned from the Board back on August 17, 2015.

4142

Committees of the Board of Directors

OnWe ~~November~~do 11not have a separately designated audit, ~~2015~~compensation, ~~the~~or nominating committee of our Board ~~approved~~and the ~~Company’s~~function ~~Audit Committee~~customarily ~~Charter,~~delegated ~~Compensation~~to ~~Committee~~these ~~Charter,~~committees ~~Nominations~~are ~~and~~performed ~~Governance~~by ~~Committee~~our ~~Charter,~~full ~~Insider~~Board. ~~Trading~~We ~~Policy~~are not a “listed company” under SEC rules, and ~~Principles of~~are ~~Corporate~~therefore ~~Governance~~not required to have separate committees comprised of independent directors.

~~Copies~~The Board does not have a nominations committee because the Board does not believe that a defined policy with regard to the consideration of ~~these~~candidates ~~documents~~recommended ~~were~~by ~~filed~~stockholders is innecessary at this time because the functions of such committee are adequately performed by our Board. There are no specific ~~Current~~minimum ~~Report~~qualifications that the Board believes must be met by a candidate recommended by the Board. Currently, the entire Board decides on ~~Form~~nominees, ~~8-K~~on asthe ~~filed~~recommendation ~~with~~of any member of the ~~SEC~~Board, followed by the Board’s review of the candidates’ resumes and interviews of candidates. Based on ~~November~~the 17information gathered, ~~2015~~the Board then makes a decision on whether to recommend the candidates as nominees for director. We do not pay any fee to any third party, ~~and~~or ~~are~~parties, ~~incorporated~~to ~~herein~~identify byor ~~reference~~evaluate or assist in identifying or evaluating potential nominees.

~~Copies~~The Board does not have an audit committee. However, for certain purposes of ~~these~~the ~~documents~~rules ~~may~~and ~~also~~regulations of the SEC and in accordance with the Sarbanes-Oxley Act of 2002, our Board is deemed to be ~~found~~its audit committee and as such functions as an audit committee and performs some of the same functions as onan audit committee including: (i) selection and oversight of our ~~website~~independent ataccountant; ~~http://www~~(ii) establishing procedures for the receipt, retention, and treatment of complaints regarding accounting, internal controls, and auditing matters; and (iii) engaging outside advisors.gf Our Board has determined that its members do not include a person who is an “audit committee financial expert” within the meaning of the rules and regulations of the SEC.~~city/investor-relations/corporate-governance~~ Our Board has determined that each of its members is able to read and understand fundamental financial statements and has substantial business experience that results in that member’s financial sophistication. Accordingly, our Board believes that each of its members has sufficient knowledge and experience to fulfill the duties and obligations of an audit committee. Furthermore, our Board has determined that the cost of hiring a financial expert to act as one of our directors and to be a member of an audit committee or otherwise perform audit committee functions outweighs the benefits of having a financial expert on an audit committee.

The Board does not have a compensation committee because the Board believes that it is not necessary to have a compensation committee at this time because the functions of such committee are adequately performed by our Board.

Meetings of the Board of Directors

Our Board conducts business through meetings or by unanimous written consents of the Board. Such actions by written consent of all directors are, according to Nevada corporate law and our bylaws, valid and effective as if they had been passed at a meeting of the directors duly called and held. The Board of Directors as of December 31, ~~2015~~2016, consisted of: ~~Ning~~a ~~Liu~~sole ~~and~~Director - Michael Dunn. ~~Neither~~ Mr. ~~Liu~~Dunn ~~nor~~does ~~Mr.~~not ~~Dunn~~qualify ~~qualifies~~ as an “independent director” pursuant to the rules and regulations of the SEC. During the fiscal year ended December 31, ~~2015~~ 2016, the Board held no formal meetings, and the Board acted by unanimous written consent on multiple occasions.

Code of Ethics

~~The~~We ~~Board~~have ~~approved~~adopted ~~our~~a ~~Amended and Restated~~ Code of ~~Conduct and~~ Ethics ~~on November 11, 2015,~~ that applies to our ~~directors,~~principal executive ~~officers~~officer, ~~senior~~principal financial ~~officers~~officer, and ~~other~~principal ~~employees~~accounting officer. Our Code of Ethics was an exhibit to our ~~Current~~Annual Report on Form 8 10-K asfor the fiscal year ended December 31, 2006 and filed with the SEC on ~~November 17~~April 16, ~~2015~~ 2007.

ITEM 11 EXECUTIVE COMPENSATION

Summary Compensation Table

Set forth below is a summary of compensation for our principal executive officer and our two most highly compensated officers other than our principal executive officer (collectively, the “named executive officers”) for our last two fiscal years. There have been no annuity, pension or retirement benefits ever paid to our officers, directors or employees.

With the exception of reimbursement of expenses incurred by our named executive officers during the scope of their employment and unless expressly stated otherwise in a footnote below, none of the named executive officers received other compensation, perquisites and/or personal benefits in excess of $10,000.

Name and Principal Position	Year		~~Year~~	Salary ($)		~~Salary ($)~~	Bonus ($)		~~Bonus~~Stock Awards ($)		Option Awards ($)	~~Stock Awards ($)~~		Non-equity Incentive Plan Compensation ($)		~~Option Awards ($)~~	All Other Compensation ($)		~~Non-equity~~Total ~~Incentive Plan Compensation~~ ($)		~~All Other Compensation ($)~~		~~Total ($)~~
Ning Liu, CEO (1)			2015			$	24,000		$	-0-		$	-0-			$	-0-		$	-0-	$	-0-	$	24,000
Ning Liu, former CEO (1)		2016		$	90,000		$	-0-	$	-0-	$	-0-		$	-0-		$	-0-	$	90,000
			2014			$	-0-		$	-0-		$	-0-			$	-0-		$	-0-	$	-0-	$	-0-
		2015		$	24,000		$	-0-	$	-0-	$	-0-		$	-0-		$	-0-	$	24,000
Michael R. Dunn, COO, CFO (2)			2015			$	20,000		$	-0-		$	-0-			$	-0-		$	-0-	$	-0-	$	20,000
Michael R. Dunn, CEO, COO, CFO (2)		2016		$	145,000		$	-0-	$	-0-	$	-0-		$	-0-		$	-0-	$	145,000
			2014			$	180,913		$	-0-		$	-0-			$	-0-		$	-0-	$	-0-	$	180,913
		2015		$	20,000		$	-0-	$	-0-	$	-0-		$	-0-		$	-0-	$	20,000

(1) Joined us April 17, 2015 and resigned October 21, 2016.

(2) Joined us May 28, 2008. For ~~2014~~2016, ~~all~~$40,000 of Mr. Dunn’s salary was accrued and ~~none~~not ~~was~~ paid.

Employment Agreements

None.

Director Compensation

On October 15, 2009 the Board of Directors approved a program to compensate our outside directors at the rate of $3,000 per calendar quarter in cash or in equivalent value of shares of our common stock. All directors are entitled to reimbursement of expenses incurred in the performance of their duties as directors, including their attendance at Board of Directors meetings.

During ~~2015~~2016 and ~~2014~~2015, wethere ~~accrued~~were ~~director’s~~no ~~fees~~outside ~~for~~directors aand ~~former~~therefore ~~outside~~not director’s infees ~~the~~were ~~amount~~paid ofor ~~$0 and $12,000, respectively~~accrued.

Grants of Plan Based Awards

There were no grants of plan-based awards during our last fiscal year.

ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information concerning our best estimate of the beneficial stock ownership of our common stock as of the date of this report pending the resolution of the issues note above. The information is presented with respect to: (i) each person who is known to us to beneficially own more than 5% of our common stock; (ii) each officer and director; and (iii) all directors and officers as a group; ~~based~~ based upon 4840,~~617~~431,~~029~~680 shares of outstanding common stock.

	Common Stock		~~Common Stock~~			Preferred Stock			~~Preferred Stock~~
Name and Address of Beneficial Owners(1)	Amount and Nature of Beneficial Ownership		~~Amount and Nature of Beneficial Ownership~~	Percent Ownership of Class(2)		~~Percent~~Amount ~~Ownership~~and Nature of ~~Class(2)~~Beneficial Ownership		Percent Ownership of Class	~~Amount and Nature of Beneficial Ownership~~	~~Percent Ownership of Class~~
Ning Liu, CEO and Director			1,235,906			2.6%			-0-	0.0%
Michael R. Dunn, CEO, COO, CFO and Director		11,443,111			28.3%		-0-		0.0%
Michael R. Dunn, COO, CFO and Director			11,443,111			23.5%			-0-	0.0%
All executive officers and directors as a group (three persons)		11,443,111			28.3%		-0-		0.0%
All executive officers and directors as a group (two persons)			11,443,111			26.1%			-0-	0.0%
Masuya Tomoe		15,647,047			38.7%		-0-		0.0%
Masuya Tomoe			15,647,047			46.8%			-0-	0.0%
Master Power Holdings Group			7,114,000			14.6%			-0-	0.0%

*Less than 1%.

(1) c/o our address, ~~P.O.~~2 ~~Box~~Park ~~4709~~Plaza, ~~Mission~~Suite ~~Viejo~~400, ~~CA 92690~~Irvine, CA 92614, unless otherwise noted.

(2) Except as otherwise indicated, we believe that the beneficial owners of common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage of the person holding such options or warrants, but are not deemed outstanding for purposes of computing the percentage of any other person.

ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Director Independence

For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 5605(a)(2). The OTCBB on which shares of common stock are quoted does not have any director independence requirements. The NASDAQ definition of “Independent Director” means a person other than an Executive Officer or employee of the Company or any other individual having a relationship which, in the opinion of the Company's Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

According to the NASDAQ definition, Mr. Dunn is not an independent director because he is also an executive officer of the Company. According to the NASDAQ definition, we have no independent directors.

Related Party Transactions

As detailed in our Notes to Financial Statements, the following relating party transactions have occurred.

Settlement Agreement

On September 19, 2014, in order to facilitate the investment by Sky Rover discussed in Note 1, we entered into settlement agreements with Michael Dunn, our former CEO, under which he agreed to forgive all accrued but unpaid salary once all closing conditions of the Sky Rover SPA had been met. In addition, Mr. Dunn gave up his right to any severance payment which would be due him under his employment agreement upon the closing of the Sky Rover SPA. The settlement agreement stipulated that Mr. Dunn would be allowed to retain no less than 2,000,000 of his then-held common shares. During the three months ended March 31, 2015, when all closing conditions of the Sky Rover SPA became effective, the terms of the settlement agreement became effective.

Sky Rover; GX-Life Share Exchange Agreement

In connection with the Sky Rover SPA, and subsequently in connection with the Share Exchange Agreement with GX-Life, certain parties may have formed a “group” under Section 13(d)(3) of the Exchange Act, and certain current and former executive officers and directors have varying degrees of affiliation which may have resulted in related party transactions. These affiliations are as follows:

In connection with the Sky Rover SPA, the following parties acquired a total of 30,400,000 shares of our common stock:

· Future Continental Limited – 7,000,000 shares; ~~· Discover Future Limited – 7,000,000 shares; · Global Future Development Limited – 7,280,000 shares; and · Master Power Holdings Group – 9,120,000 shares.~~

Discover Future Limited – 7,000,000 shares;

Global Future Development Limited – 7,280,000 shares; and

Master Power Holdings Group – 9,120,000 shares.

Future Continental Limited, Discover Future Limited, Global Future Development Limited, and Master Power Holdings Group collectively acquired 30,400,000 shares in our Company in connection with the Sky Rover SPA. By virtue of the manner in which these acquiring shareholders acquired the shares, they may be deemed to have formed a “group” within the meaning of Section 13(d)(3) of the Exchange Act. However, each of these acquiring shareholders disclaims beneficial ownership of the shares beneficially owned by each other party.

In addition, a few of our former executive officers and directors had affiliations with the acquiring shareholders which may be classified as related party transactions. Namely, 1) Junfei Ren, our former Secretary and director, is the sole officer of Global Future Development Limited, but has no voting control over the entity, and 2) our former officer and director Lei Pei is the COO and a director of Sky Rover as well as a minority shareholder.

However, on October 2, 2015, our Company via its former EGD Subsidiary, entered into a Share Exchange Agreement with GX-Life whereby we spun-off 100% of its then ownership interests in the EGD Subsidiary and 4,000,000 EGD in exchange for 100% of the outstanding common stock of GX-Life. In a related transaction, on October 2, 2015, the former shareholders of GX-Life Global sold all of their interests in the EGD Subsidiary to the acquiring shareholders in the Sky Rover SPA in exchange for 21,280,000 shares of our Company previously acquired in the Sky Rover SPA.

Michael Dunn and Ning Liu were shareholders in GX-Life, and acquired shares in our Company as a result of the series of transactions discussed in the preceding paragraphs. In addition, Masuya Tomoe, an affiliate shareholder, was also a shareholder in GX-Life which acquired Company shares as a result of the foregoing transactions.

Other than the foregoing, none of the directors or executive officers of the Company, nor any person who owned of record or was known to own beneficially more than 5% of the Company’s outstanding shares of its Common Stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect, in any transaction that has occurred during the past fiscal year, or in any proposed transaction, which has materially affected or will affect the Company.

With regard to any future related party transaction, we plan to fully disclose any and all related party transactions in the following manner:

Disclosing such transactions in reports where required;

Disclosing in any and all filings with the SEC, where required;

Obtaining disinterested directors consent; and

Obtaining shareholder consent where required.

Review, Approval or Ratification of Transactions with Related Persons

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 14 PRINCIPAL ACCOUNTING FEES AND SERVICES

dbbmckennon (the “Independent Auditors”) were our independent auditors and examined our consolidated financial statements for the years ended December 31, 2016 ~~2015~~ and ~~2014~~2015, respectively. The Independent Auditors performed the services listed below and ~~were~~billed us, or are expected to bill ~~paid~~us, the aggregate fees listed below ~~during~~for the years ended December 31, ~~2015~~2016 and ~~2014~~2015.

Audit Fees

The Independent Auditors billed us, or are expected to bill us, aggregate fees of approximately $76,~~231~~413 for the fiscal year ended December 31, ~~2015~~2016 and approximately $4875,~~000~~065 for the fiscal year ended December 31, ~~2014~~2015 for professional services rendered for their audit of our annual financial statements and their reviews of our financial statements included in our quarterly reports on Form 10-Q during these periods.

Audit-Related Fees

The Independent Auditors billed us aggregate fees of approximately $69,~~750~~965 and $0 for the ~~year~~fiscal years ended December 31, ~~2015~~2016 and ~~did~~2015, ~~not bill us any fees for the year ended December 31~~respectively, ~~2014~~ for audit- ~~related~~ related professional services.

Tax Fees

The Independent Auditors billed us aggregate fees of approximately $45,~~500~~700 and $0 for the ~~year~~fiscal years ended December 31, ~~2015~~2016 and ~~did~~2015, ~~not bill us any fees for the year ended December 31~~respectively, ~~2014~~ for professional services for tax compliance, tax advice and tax planning during this fiscal year period.

All Other Fees

The Independent Auditors did not bill us any fees for either of the years ended December 31, ~~2015~~2016 or ~~2014~~2015 for any other professional services.

Board of Directors Pre-Approval Policies and Procedures

Our Board of Directors has policies and procedures that require the pre-approval by the Board of all fees paid to, and all services performed by, our independent accounting firms. The fees and services provided as noted above were authorized and approved by the Board in compliance with the pre-approval policies and procedures described herein. ~~dbbmckennon is expected to be present at our 2016 stockholders’ meeting.~~

4446

PART IV

ITEM 15 EXHIBITS, FINANCIAL STATEMENT SCHEDULES

2.1	Agreement and Plan of Merger by and among Snocone Systems Inc., WYD Acquisition Corp. and Who’s Your Daddy, Inc., dated April 1, 2005 (1)	~~Agreement and Plan of Merger by and among Snocone Systems Inc., WYD Acquisition Corp. and Who’s Your Daddy, Inc., dated April 1, 2005 (1)~~
2.2	Merger and Reorganization Agreement, dated June 18, 2013, by and between FITT Highway Products, Inc. and F.I.T.T. Energy Products, Inc. (2)	~~Merger and Reorganization Agreement, dated June 18, 2013, by and between FITT Highway Products, Inc. and F.I.T.T. Energy Products, Inc. (2)~~
2.3	Merger Agreement and Articles of Merger, with an effective date of October 29, 2014, by and between FITT Highway Products, Inc. and Global Future City Holding Inc. (3)	~~Merger Agreement and Articles of Merger, with an effective date of October 29, 2014, by and between FITT Highway Products, Inc. and Global Future City Holding Inc. (3)~~
3.1	Amended and Restated Articles of Incorporation, dated December 4, 2001 (4)	~~Amended and Restated Articles of Incorporation, dated December 4, 2001 (4)~~
3.2	Amended and Restated Bylaws, dated December 4, 2001 (4)	~~Amended and Restated Bylaws, dated December 4, 2001 (4)~~
3.3	Amended and Restated Articles of Incorporation, dated April 27, 2005 (5)	~~Amended and Restated Articles of Incorporation, dated April 27, 2005 (5)~~
3.4	Amended and Restated Articles of Incorporation, dated June 1, 2010 (6) (7)	~~Amended and Restated Articles of Incorporation, dated June 1, 2010 (6) (7)~~
10.1	Employment Agreement with Michael R. Dunn dated August 24, 2009 (8)	~~Employment Agreement with Michael R. Dunn dated August 24, 2009 (8)~~
10.2	Employment Agreement with Robert E. Crowson, Jr. dated August 24, 2009 (8)	~~Employment Agreement with Robert E. Crowson, Jr. dated August 24, 2009 (8)~~
10.3	Share Exchange Agreement, dated May 6, 2014, by and between FITT Highway Products, Inc. and Greenome Development Group, Inc. (9)	~~Share Exchange Agreement, dated May 6, 2014, by and between FITT Highway Products, Inc. and Greenome Development Group, Inc. (9)~~
10.4	Stock Purchase Agreement, dated September 19, 2014, by and between FITT Highway Products, Inc. and Sky Rover Holdings, Ltd. (10)	~~Stock Purchase Agreement, dated September 19, 2014, by and between FITT Highway Products, Inc. and Sky Rover Holdings, Ltd. (10)~~
10.5	Financing Agreement, dated September 19, 2014, by and between FITT Highway Products, Inc. and Greenome Development Group, Inc. (10)	~~Financing Agreement, dated September 19, 2014, by and between FITT Highway Products, Inc. and Greenome Development Group, Inc. (10)~~
10.6	First Amendment to Stock Purchase Agreement between Global Future City Holding Inc. and Sky Rover Holdings, Ltd., dated February 17, 2015 (11)	~~First Amendment to Stock Purchase Agreement between Global Future City Holding Inc. and Sky Rover Holdings, Ltd., dated February 17, 2015 (11)~~
10.7	Membership Interest Purchase and Sale Agreement by and between Global Future City Holding Inc. and Powerdyne, Inc., dated March 26, 2015 (12)	~~Membership Interest Purchase and Sale Agreement by and between Global Future City Holding Inc. and Powerdyne, Inc., dated March 26, 2015 (12)~~
10.8	Second Amendment to Stock Purchase Agreement executed by and between Global Future City Holding Inc. and Sky Rover Holdings, Ltd., dated April 17, 2015 (13)	~~Second Amendment to Stock Purchase Agreement executed by and between Global Future City Holding Inc. and Sky Rover Holdings, Ltd., dated April 17, 2015 (13)~~
10.9	Resignation Agreement by and between Global Future City Holding Inc. and Lei Pei, dated August 17, 2015 (14)	~~Resignation Agreement by and between Global Future City Holding Inc. and Lei Pei, dated August 17, 2015 (15)~~
10.10	Resignation Agreement by and between Global Future City Holding Inc. and Xiang Ling Yun, dated August 17, 2015 (14)	~~Resignation Agreement by and between Global Future City Holding Inc. and Xiang Ling Yun, dated August 17, 2015 (15)~~
10.11	Resignation Agreement by and between Global Future City Holding Inc. and Junfei Ren, dated August 17, 2015 (14)	~~Resignation Agreement by and between Global Future City Holding Inc. and Junfei Ren, dated August 17, 2015 (15)~~
10.12	Share Exchange Agreement by and between GX-Life Global, Inc., GX-Life Global Shareholders, Global Modern Enterprise Limited and Global Future City Holding Inc., dated October 2, 2015 (15)	~~Share Exchange Agreement by and between GX-Life Global, Inc., GX-Life Global Shareholders, Global Modern Enterprise Limited and Global Future City Holding Inc., dated October 2, 2015 (16)~~
10.13	Private Stock Purchase Agreement between Exchange Agreement between Future Continental Limited, Discover Future Limited, Global Future Development Limited and the shareholders of Global Modern Enterprise Limited, dated October 2, 2015 (15)	Private Stock Purchase Agreement between Exchange Agreement between Future Continental Limited, Discover Future Limited, Global Future Development Limited and the shareholders of Global Modern Enterprise Limited, dated October 2, 2015 (16)
10.14	Software License and Services Agreement by and between GX-Life Global, Inc. and Great Coin, Inc., dated February 17, 2016 (16)	~~Form of Software License and Services Agreement by and between GX-Life Global, Inc. and Great Coin, Inc., dated February 17, 2016~~
14.1		Amended and Restated Code of Conduct and Ethics, dated November 11, 2015 (17)
10.15	Amendment and Restatement to Software License and Services Agreement (Access and Services Agreement) by and between GX-Life Global, Inc. and Great Coin, Inc., dated September 30, 2016(17)
21.1		List of Subsidiaries (14)
10.16	Stock Issuance Cancellation Agreement, between Big Name Group, Master Power Holdings Group and the Company, dated as of March 20, 2017 (19)
99.1		Audit Committee Charter, dated November 11, 2015 (17)
14.1	Amended and Restated Code of Conduct and Ethics, dated November 11, 2015 (18)
99.2		Nominations and Governance Committee Charter, dated November 11, 2015 (17)
21.1	List of Subsidiaries (17)
99.3		Compensation Committee Charter, dated November 11, 2015 (17)
99.1	Audit Committee Charter, dated November 11, 2015 (18)
99.4		Insider Trading Policy, dated November 11, 2015 (17)
99.2	Nominations and Governance Committee Charter, dated November 11, 2015 (18)
99.5		Principles of Corporate Governance, dated November 11, 2015 (17)
99.3	Compensation Committee Charter, dated November 11, 2015 (18)
99.6		Post-Effective Amendment No. 2 (18)
99.4	Insider Trading Policy, dated November 11, 2015 (1)
31.1		Certification of Chief Executive Officer Pursuant to the Securities Exchange Act of 1934, Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer Pursuant to the Securities Exchange Act of 1934, Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certifications Pursuant to 18 U.S.C., Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certifications Pursuant to 18 U.S.C., Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance Document
101.SCH		XBRL Schema Document
101.CAL		XBRL Calculation Linkbase Document
101.DEF		XBRL Definition Linkbase Document
101.LAB		XBRL Label Linkbase Document
101.PRE		XBRL Presentation Linkbase Document

(1) Incorporated by reference from our Current Report on Form 8-K filed with the SEC on April 7, 2005.

99.5	Principles of Corporate Governance, dated November 11, 2015 (18)
31.1	Certification of Chief Executive Officer Pursuant to the Securities Exchange Act of 1934, Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer Pursuant to the Securities Exchange Act of 1934, Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certifications Pursuant to 18 U.S.C., Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certifications Pursuant to 18 U.S.C., Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	XBRL Instance Document
101.SCH*	XBRL Schema Document
101.CAL*	XBRL Calculation Linkbase Document
101.DEF*	XBRL Definition Linkbase Document
101.LAB*	XBRL Label Linkbase Document
101.PRE*	XBRL Presentation Linkbase Document

~~(2)~~*Filed ~~Incorporated~~concurrently ~~by reference from our Current Report on Form 8-K filed with the SEC on June 19, 2013.~~herewith

(3) Incorporated by reference from our Current Report on Form 8-K filed with the SEC on October 29, 2014.

	(1)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on April 7, 2005.
	(2)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on June 19, 2013.
	(3)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on October 29, 2014.
	(4)	Incorporated by reference from our Registration Statement on Form 10SB filed with the Commission on January 18, 2002.
	(5)	Incorporated by reference from our Schedule 14C Definitive Information Statement file with the Commission on June 28, 2005.
	(6)	Incorporated by reference from our Schedule 14C Definitive Information Statement file with the Commission on June 21, 2010.
	(7)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on July 21, 2010.
	(8)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on August 26, 2009.
	(9)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on May 9, 2014.
	(10)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on September 23, 2014.
	(11)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on February 20, 2015.
	(12)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on March 30, 2015.
	(13)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on April 20, 2015.
	(14)	Incorporated by reference form our Quarterly Report on Form 10-Q filed with the Commission on September 9, 2015.
	(15)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on October 8, 2015.
	(16)	Incorporated by reference from our Annual Report on Form 10-K filed with the Commission on April 13, 2016
	(17)	Incorporated by reference from our Amendment No. 1 to Post-Effective Amendment No. 3 on July 22, 2016
	(18)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on November 17, 2015
	(19)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on March 20, 2017

~~(4) Incorporated by reference from our Registration Statement on Form 10SB filed with the SEC on January 18, 2002.~~48

(5) Incorporated by reference from our Schedule 14C Definitive Information Statement file with the SEC on June 28, 2005.

(6) Incorporated by reference from our Schedule 14C Definitive Information Statement file with the SEC on June 21, 2010.

(7) Incorporated by reference from our Current Report on Form 8-K filed with the SEC on July 21, 2010.

(8) Incorporated by reference from our Current Report on Form 8-K filed with the SEC on August 26, 2009.

(9) Incorporated by reference from our Current Report on Form 8-K filed with the SEC on May 9, 2014.

(10) Incorporated by reference from our Current Report on Form 8-K filed with the SEC on September 23, 2014.

(11) Incorporated by reference from our Current Report on Form 8-K filed with the SEC on February 20, 2015.

(12) Incorporated by reference from our Current Report on Form 8-K filed with the SEC on March 30, 2015.

(13) Incorporated by reference from our Current Report on Form 8-K filed with the SEC on April 20, 2015.

(14) Incorporated by reference from our Registration Statement on Form S-1 filed with the SEC on May 8, 2015.

(15) Incorporated by reference form our Quarterly Report on Form 10-Q filed with the SEC on September 9, 2015.

(16) Incorporated by reference from our Current Report on Form 8-K filed with the SEC on October 8, 2015.

(17)	Incorporated by reference from our Current Report on Form 8-K filed with the SEC on November 17, 2015
(18)	Incorporated by reference from our Post-Effective Amendment No.2 filed with the SEC on December 2, 2015

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	GLOBAL FUTURE CITY HOLDING INC.
DATED: April 13, 2015	/s/ Ning Liu
DATED: April 17, 2017	/s/ Michael R. Dunn
	By: Ning Liu
	By: Michael R. Dunn
	Its: Chief Executive Officer (Principal Executive Officer)
	/s/ Michael R. Dunn
	By: Michael R. Dunn
	Its: Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

46In accordance with the Exchange Act, this report has been signed below by the following person(s) on behalf of the registrant and in the capacities and on the date(s) indicated.

DATED: April 17, 2017	/s/ Michael R. Dunn
	By: Michael R. Dunn
	Its: Chief Executive Officer, Chief Financial Officer and sole director

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